Economic Valuation of Improved Irrigation Water in Bahir Dar Zuria Woreda, Ethiopia
Volume 5, Issue 3, June 2016, Pages: 46-55
Received: Apr. 19, 2016; Accepted: Apr. 29, 2016; Published: Jun. 29, 2016
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Ayana Anteneh Astatike, Department of Economics, College of Business and Economics, Wolaita Sodo University, Wolaita Sodo, Ethiopia
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This study attempts to determine the economic value of improved irrigation water by eliciting farmers’ willingness to pay (WTP) using contingent valuation method in Bahir Dar Zuria Woreda, Ethiopia. Single bounded and double bounded dichotomous choices with a follow up open ended questions were employed. Primary data obtained from 197 randomly sampled household heads was analyzed using both descriptive statistics and Econometric models. The descriptive analysis indicates that the mean annual income of the irrigators is twice more than that of non-irrigators. In this study, Probit and Bivariate Probit models were used to measure WTP and to determine the factors that influence the variation in WTP. To identify the basic determinants of maximum WTP, the author also used Tobit model. The mean willingness to pay for the provision of improved irrigation water is found to be birr 674.5 and 579 per year/0.25 ha from the double bounded dichotomous choice and open-ended questions, respectively. Consequently, the aggregate willingness to pay for improved irrigation water supply using the double bounded dichotomous choice and open ended questions is estimated about birr 15,703,709 and 13,480,278 per year, respectively. Among the surveyed households, 99 percent have shown their willingness to pay if there is an improvement in existing irrigation water supply. Thus, the result of this study suggests that it may be a good indicator for investment to expand the current irrigation projects and introducing irrigation water pricing.
Contingent Valuation, Willingness to Pay, Improved Irrigation Water, Ethiopia
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Ayana Anteneh Astatike, Economic Valuation of Improved Irrigation Water in Bahir Dar Zuria Woreda, Ethiopia, Economics. Vol. 5, No. 3, 2016, pp. 46-55. doi: 10.11648/
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