Valuing the Benefits of Improved Lake Quality: An Application of Choice Experiment to the Case of Lake Awassa

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Addis Ababa University


The Lake environment provides many goods and services depending on the different attributes of the surrounding environment. In this paper, we identified, among other things three attributes, i.e., two environmental attributes (Tilapia fish stock, Surrounding forest cover) and one monetary attribute (fishing permit). We carry out a Choice experiment among fishermen of Awassa Lake to estimate the value of improvement of the lake quality in general in terms of the attributes selected. We analyzed the data using Multinomial logit model and derive important issues concerning the preferences of fishermen of Lake Awassa. Results confirm that fishermen of Awassa Lake have high levels of environmental concern and are willing to pay for the improvement of the lake environment in terms of the attributes selected in the Choice experiment. According to our result the most preferred attribute is Tilapia stock and it is also a significant attribute and therefore the most urgent action is to firstly to prevent further depletion of the Tilapia fish stock of the lake. This is also reflected in their higher willingness to pay for Tilapia fish stock improvement. Very low willingness to pay is observed for improvement in the degraded surrounding vegetation and forest cover of the lake. The marginal willingness to pay(Implicit prices) for the environmental attributes Tilapia fish stock and Surrounding forest cover were estimated. The mean WTP for Tilapia fish stock improvement is estimated to be 8.83 birr per month. However, mean willingness to pay for improvements in the surrounding forest cover is almost insignificant. Compensating surplus estimates which reflect overall willingness to pay for a change from the status quo (current situation) to alternative improvement scenarios were also calculated. The estimate for the high impact scenario was estimated to be 31.42 birr, for medium impact scenario 28.62 birr and for low impact scenario it was 18.62 birr per month. One important implication draw from the study is that since the fishermen are willing to support the plan for the environmental improvement, the introduction of fishing permit is promising feature for resource users and as well as to the management of the natural resources as the whole.



Resource and Environmental Economics, Environmental Economics