Valuing the Benefits of Improved Lake Quality: An Application of Choice Experiment to the Case of Lake Awasa
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Date
2006-07
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A.A.U
Abstract
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.
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Keywords
Benefits of improved Lake Quality, Choice Experiment to the Case of Lake Awasa