Economic valuation of ecosystem services of Lake Dambal in Oromia regional state, Ethiopia

Abstract

Protecting Lake Ecosystem is crucial not only to protect this country’s public and economic health, but also to preserve and to restore the natural environment for all aquatic and terrestrial living things. Even if the Dambal is known for its` multifuctionality and rich in it’s` lake resources, some parts of this lake is now degraded. This study was initiated to estimate households’ mean willingness to pay (WTP) for the protection of the lake and to identify factors that affects the maximum willingness to pay for protection of Dambal lake. To meet these objectives, data from 237 rural households were collected using multi stage random sampling procedures. In the study both descriptive and econometrics analysis are employed. Econometric models such as, seemingly unrelated bivariate probit and double hurdle models were used to estimate mean WTP and determinants of WTP, respectively. Factors such as age of household head, credit acess, distance from home to the lake, frequency of extension contact and participation in lake conservation practices have significant effect on the households’ WTP. Thus, critical consideration of such factors is pertinent to increase the level of public support towards the rehabilitation intervention. Econometric models such as, seemingly unrelated bivariate probit and double hurdle models were used to estimate mean WTP and determinants of WTP, respectively. The result shows that the mean WTP values from double bounded dichotomous choice ranges From 195.5 to 250.7ETB per year per household. Therefore, the aggregate welfare gain expected from the protection intervention ranges from 5,540,733.6 to 6,352,405.1 per year.