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.
| Published in | Economics (Volume 5, Issue 3) |
| DOI | 10.11648/j.eco.20160503.12 |
| Page(s) | 46-55 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2024. Published by Science Publishing Group |
Contingent Valuation, Willingness to Pay, Improved Irrigation Water, Ethiopia
| [1] | Abdullah, S. and Jeanty, P. (2011); Willingness to pay for renewable energy: Evidence from a contingent valuation survey in Kenya. Renewable and Sustainable Energy Reviews 15 (2011) 2974–2983. |
| [2] | Arrow, K., Solow, R., Portney, P. R., Leamer, E. E., Radner, R. and Schuman, H. (1993); Report of the NOAA Panel on Contingent Valuation. |
| [3] | Ahmed, S. U. and Gotoh, K. (2006); the Choice of Elicitation Methods in CVM and their Impact on Willingness to Pay in Environmental Assessment. |
| [4] | Amhara Design & Supervision Works Enterprise (2012); Upper Andassa Irrigation Development Project Socio-economic Feasibility Study Report. Amhara Regional State Water Resource Development Bureau. |
| [5] | Awulachew, B. S., Erkossa, T. and Namara, R. E. (2010); Irrigation potential in Ethiopia; Constraints and opportunities for enhancing the system; International water management institute (IWMI). |
| [6] | Awulachew, B. S., Yilma, A. D., Loulseged, M., Loiskandl, W., Ayana, M., Alamirew, T. (2007); Water Resources and Irrigation Development in Ethiopia, International Water Management Institute, Working Paper 123. |
| [7] | Economic Commission for Africa (2001); the Africa Water Vision for 2025: Equitable and Sustainable Use of Water for Socioeconomic Development. |
| [8] | EU water institute (2012); pricing water resources to finance their sustainable management a think-piece for the EUWI Finance Working Group. |
| [9] | Greene, W. H. (2003); Econometric Analysis. Fifth edition New York University Pearson; Education, Inc., publishing as Prentice Hall. |
| [10] | Haab, T. C. and McConnell, K. E. (2003); Valuing Environmental and Natural Resources – The Econometrics of Non-Market Valuation. Edward Elgar Publishing Limited. United Kingdom. |
| [11] | Hanemann, M. W. (1984); Welfare Evaluations in Contingent Valuation Experiments with Discrete Response Data. American Journal of Agricultural Economics. Vol. 66, No. 3, pp. 332-341: Oxford University Press. |
| [12] | Hanemann, W. M, Loomis, J. B. and Kanninen, B. J. (1991); Statistical Efficiency of Double-Bounded Dichotomous Choice Contingent Valuation. American Journal of Agricultural Economics 73:4, 1255-1263. |
| [13] | Jeanty, W. P. (2007); Constructing Krinsky and Robb Confidence Intervals for Mean and Median Willingness to Pay (WTP) Using Stata. Agricultural, Environmental, and Development Economics. The Ohio State University 6th North American Stata Users’ Group Meeting August13-14, 2007. |
| [14] | Krinsky I, Robb A. (1986); on approximating the statistical properties of elasticities. Review of Economics and Statistics, Vol. (68), pp. 715-719. |
| [15] | Mezgebo, A., Tessema, W., and Asfaw, Z. (2013); Economic Values of Irrigation Water in Wondo Genet District, Ethiopia: An Application of Contingent Valuation method. Journal of Economics and Sustainable Development. Vol. 4, No. 2, 2013. |
| [16] | Ministry of Water Resources (2001); Ethiopian Water Resources Management Policy. |
| [17] | Ministry of Water Resources (2002); Water Sector Development Program, Main Report Volume |
| [18] | Ministry of Water Resources (2009); irrigation and drainage project in Lake Tana sub-basin (Megech, Gilgel Abay and Jemma); Final feasibility study and detailed design of irrigation and drainage projects in Lake Tana sub-basin Gilgel Abay project; vol. 14 –socioeconomic study. |
| [19] | Ministry of Water Resources (2013); Brief Description of the Ministry of Water and Energy. Accessed at http://www.mowr.gov.et/index.php?pagenum=1.1 |
| [20] | Omondi, S. (2014) Economic Valuation of Irrigation Water in Ahero Irrigation Scheme in Nyando District, University of Nairobi, Kenya. |
| [21] | Planning commission Government of Pakistan (2012); Canal Water Pricing for Irrigation in Pakistan: Assessment, issues, and options. |
| [22] | Storm, H., Heckelei, T., Heidecke, C. (2010) Demand Estimation for Irrigation Water in the Moroccan Drâa Valley using Contingent Valuation. |
| [23] | Tesfaye, B. (2013); Economic Valuation of Irrigation Water for Sustainable Use of Resource in the Upper Blue Nile Basin: The Case of Koga Irrigation Project: unpublished thesis, Bahir Dar University, Ethiopia. |
| [24] | Tiwari, D. N. (2005); Determining economic value of irrigation water: comparison of willingness to pay and indirect valuation approaches as a measure of sustainable resource use, CSERGE Working Paper GEC 98-05. |
| [25] | Verbeek, Marno (2004); A Guide to Modern Econometrics 2nd edition, Erasmus University Rotterdam, John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex PO19 8SQ, England. |
APA Style
Ayana Anteneh Astatike. (2016). Economic Valuation of Improved Irrigation Water in Bahir Dar Zuria Woreda, Ethiopia. Economics, 5(3), 46-55. https://doi.org/10.11648/j.eco.20160503.12
ACS Style
Ayana Anteneh Astatike. Economic Valuation of Improved Irrigation Water in Bahir Dar Zuria Woreda, Ethiopia. Economics. 2016, 5(3), 46-55. doi: 10.11648/j.eco.20160503.12
AMA Style
Ayana Anteneh Astatike. Economic Valuation of Improved Irrigation Water in Bahir Dar Zuria Woreda, Ethiopia. Economics. 2016;5(3):46-55. doi: 10.11648/j.eco.20160503.12
Share This Article
Twitter
Linked In
Facebook
Copy
Download@article{10.11648/j.eco.20160503.12,
author = {Ayana Anteneh Astatike},
title = {Economic Valuation of Improved Irrigation Water in Bahir Dar Zuria Woreda, Ethiopia},
journal = {Economics},
volume = {5},
number = {3},
pages = {46-55},
doi = {10.11648/j.eco.20160503.12},
url = {https://doi.org/10.11648/j.eco.20160503.12},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20160503.12},
abstract = {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.},
year = {2016}
}
TY - JOUR T1 - Economic Valuation of Improved Irrigation Water in Bahir Dar Zuria Woreda, Ethiopia AU - Ayana Anteneh Astatike Y1 - 2016/06/29 PY - 2016 N1 - https://doi.org/10.11648/j.eco.20160503.12 DO - 10.11648/j.eco.20160503.12 T2 - Economics JF - Economics JO - Economics SP - 46 EP - 55 PB - Science Publishing Group SN - 2376-6603 UR - https://doi.org/10.11648/j.eco.20160503.12 AB - 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. VL - 5 IS - 3 ER -
Information
Email: