Valuation of Wetland Attributes: An Application of Choice Experiment Approach: A Case Study of Lake Koka
Journal of Investment and Management
Volume 8, Issue 5, October 2019, Pages: 76-85
Received: Aug. 13, 2019; Accepted: Sep. 11, 2019; Published: Jan. 4, 2020
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Authors
Bulo Feyisa, Department of Economics, Jinka University, Jinka, Ethiopia
Mekonnen Bersisa, Department of Economics, Ambo University, Ambo, Ethiopia
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Abstract
Ethiopia has many lakes, the greater part of which is found in the Rift-valley, that are central for the development of economy of the country. One of these Lakes is Lake Koka, which is found inside the Ethiopian Rift Valley, and is an artificial lake built in 1960 to generate hydroelectric power. In spite of different advantages provided by Lake Koka, absence of powerful administration, uncontrolled irrigation, intensive agriculture and different human made activities has prompted to the degradation of the wetland. Human made activities such as, using wetland as waste disposal, over grazing, etc. aggravate the problems of the lake. To assign monetary values for the multi-functions and services offered by this Lake wetland ecosystem, this study applied choice experiment valuation method by identifying five attributes i.e. fish stock, biodiversity, water quality, availability of water and monetary payment. Multinomial logit, random parameter logit and latent class models were used to analyze the data collected from a sample of 200 respondents. The marginal willingness to pay for the improvement of water availability attribute is the highest which is birr 55 and it is significant at 1% level. Respondent’s willingness to pay for an increase in the level of water quality of Lake Koka and biodiversity from current situation of the lake, other things being constant, is birr 42 and birr 12 annually respectively. Respondents gave more value to the availability of water than biodiversity and water quality attributes.
Keywords
Koka Lake, Choice Experiment, Multinomial Logit, Mixed Logit, Random Parameter Logit, Latent Class Model
To cite this article
Bulo Feyisa, Mekonnen Bersisa, Valuation of Wetland Attributes: An Application of Choice Experiment Approach: A Case Study of Lake Koka, Journal of Investment and Management. Vol. 8, No. 5, 2019, pp. 76-85. doi: 10.11648/j.jim.20190805.11
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Copyright © 2019 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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