Households’ Willingness to Pay For The Rehabilitation of Wetlands: Evidence From Gudera Wetland, Northwest Ethiopia

Abstract Although Gudera wetland is known for its multi-functionality, it is at the edge of collapse at this time. The study was initiated to estimate households’ mean willingness to pay (WTP) for the rehabilitation of the wetland and its welfare gains from the intervention. It was also aimed to identify major determinants for the wetland rehabilitation intervention. To meet these objectives, data from 237 rural households were collected using two stage random sampling procedures. Econometric models such as, seemingly unrelated bivariate probit and double hurdle models were used to estimate mean WTP and determinants of WTP, respectively. The result shows that the mean WTP values from double bounded dichotomous choice ranges from 70.44 to 80.64 Ethiopian Birr per year per household. Therefore, the aggregated welfare gain expected from the rehabilitation intervention ranges from 2,033,180 to 2,327,593 Ethiopian Birr per year. Factors such as farm income, participation in natural resource conservation, frequency of extension contact and trust on budget allocation have a positive and significant effect on the households’ WTP. While, factors such as land size around the wetland, distance to the wetland and credit have a negative influence on households’ WTP. Thus, critical consideration of such factors is pertinent to increase the level of public support towards the rehabilitation intervention.