Estimating the Value for Conservation of Wonchi Crater Lake (Application of Contingent Valuation Method)
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Date
2014-06
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Addis Ababa University
Abstract
The reason why the Natural Resources or Environmental Goods and Services are polluting and destroying is due to the nature of the resources, they have the property of Public Goods which have no market value. Despite of their importance, society over utilize them for only the current benefits without thinking the future life span of these resources. The problems related to Natural Resources and Environmental Goods is now a day the main topic of discussion in every Conference and Panel discussions. The main objective of this study is, therefore, estimating the value of these resources as if they are conserved. Among all, this study focused on Conservation of Wenchi Crater Lake, which is very affecting lake by society. It is, the society’s Willingness to pay (WTP) as if this lake is conserved. Contingent Valuation Method (CVM) was applied based on its advantages over other methods of valuation. To identify the individuals’ WTP for conservation of the lake, Closed-ended question format was used. Follow-up question which is open was used to see whether there is starting bid bias or not, but excluded from analysis. As of the descriptive statistics and Econometric results, from total of usable sample size 193, 190 (98%) were perceived the problem and are willing to pay. The result also shows as there is no serious starting bias so that individuals expressed their, nearly, true WTP which was proved by asking the follow-up question about their maximum WTP amount. From Econometric results, Probit and logit models, explanatory variables such as income, education, Origin, family size, and occupation of the respondents are positively affect the probability of saying ‘yes’ for proposed bids and are statistically significant variables at different level. Another variables, Age and Initial bids are also significant at 1% but negative impact on the probability of saying yes. Therefore, taking the importance of the lake for society and for government in to consideration, and the society’s WTP, the policy makers, and even government need to focus on identified factors in designing strategies for the conservation of the lake. Key words: Willingness-to-pay, Contingent Valuation Method, Conservation of Wenchi Crater Lake
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Keywords
Willingness-to-pay, Contingent Valuation Method, Conservation of Wenchi Crater Lake.