Application of Contingent Valuation Method (CVM) to assess residents' willingness to pay for Sustainable Choke Mountain Ecosystem, East Gojam, Ethiopia

Technical Summary: Application of Contingent Valuation Method (CVM) to Assess Residents' Willingness to Pay for Sustainable Choke Mountain Ecosystem

1. Problem Statement and Context
The Choke Mountain range in East Gojam, Ethiopia, serves as a critical "water tower" for the Upper Blue Nile River system, feeding over 59 rivers and 273 springs. It supports diverse ecosystems, including wetlands, unique biodiversity (e.g., Giant Lobelia, Ethiopian Wolf), and significant tourism potential. Despite its ecological and economic importance to downstream nations (Sudan, Egypt) and local communities, the ecosystem faces severe degradation. Between 1986 and 2005, the region lost 22.4 km² of open water and 607 km² of low-moisture seasonal swamps. Drivers of this decline include population growth, poverty, deforestation, soil erosion, and climate change.

The core problem addressed is the lack of economic valuation for these ecosystem services. Because these services often lack market prices and policymakers lack knowledge of their multidimensional value, there is an absence of strong national wetland policies or conservation strategies. The study aims to estimate the economic value of the Choke Mountain ecosystem to inform conservation and management mechanisms, specifically by quantifying the local residents' Willingness to Pay (WTP) for improved ecosystem services.

2. Methodology
The study employed a cross-sectional research design utilizing primary data collected in 2024–2025.

• Sampling: A simple random sampling technique was used to select 408 usable households from three purposively selected Woredas (Bibugn, Sinan, and Debey Tilat Gin) out of an initial 450 interviewees.
• Data Collection: A well-designed questionnaire was administered via in-person interviews. The study utilized a single-bounded dichotomous choice format within the Contingent Valuation Method (CVM). Respondents were presented with a hypothetical scenario of ecosystem improvement and asked a "Yes/No" question regarding their willingness to pay a specific initial bid amount.
• Econometric Model: The binary response data ("Yes" = 1, "No" = 0) were analyzed using the Probit model, based on the Random Utility Model (RUM). The model estimates the probability of a "Yes" response as a function of various socio-economic and perceptual variables.
  • Dependent Variable: WTP (dummy variable).
  • Independent Variables: Gender, education, age, family size, household income, marital status, perception of degradation, perception of biodiversity loss, perception of water source utility, perception of tourism potential, perception of recreational facilities, satisfaction levels, distance from the mountain, and the initial bid amount.
• WTP Estimation: The mean WTP was calculated using the formula: $Mean\ WTP = -\sigma / \beta$, where $\sigma$ is the intercept and $\beta$ is the coefficient of the bid variable.

3. Key Results
The Probit model estimation (using STATA 17) yielded a Pseudo R² of 0.9067, indicating a strong fit. The analysis identified several significant determinants of WTP:

• Positive Determinants (Increase likelihood of "Yes"):

  • Gender: Male respondents were significantly more likely to accept the bid than females (25.5% higher probability).
  • Education: Literate households showed a higher willingness to pay (significant at the 10% level).
  • Family Size: Larger families were more likely to pay; a one-member increase in family size raised the probability of acceptance by 15.1%.
  • Income: Higher annual household income positively correlated with WTP (significant at 1%).
  • Perceptions of Degradation: Households perceiving mountain degradation, biodiversity loss, or inefficient water sources were significantly more likely to pay. Specifically, perceiving biodiversity degradation increased acceptance probability by 49.6%.
  • Tourism and Recreation: Viewing the mountain as a tourist destination or recognizing the need for better recreational facilities significantly increased WTP (91.2% and 84.2% higher probability, respectively).
  • Satisfaction: Dissatisfaction with current ecosystem services positively influenced the willingness to pay for improvements.

• Negative Determinants (Decrease likelihood of "Yes"):

  • Age: Older respondents were less likely to accept the bid; the probability of a "Yes" response decreased by 3.3% for every additional year of age.
  • Initial Bid: As expected, a higher initial bid amount significantly reduced the probability of acceptance (1.04% decrease in probability for a 1% increase in bid).

• Quantitative Finding:
  The study calculated a mean Willingness to Pay of 122.8 Ethiopian Birr per household per month for enhanced Choke Mountain ecosystem services. Approximately 80.9% of the sampled households expressed a preference to pay this amount.

4. Contributions and Significance
The paper claims its primary contribution is providing an empirical economic valuation of the Choke Mountain ecosystem services, a step deemed necessary for developing effective conservation and management policies. By quantifying the value residents place on the ecosystem, the study addresses the "market failure" where ecosystem services lack a price tag.

The significance of the findings lies in their policy implications:

• Conservation Financing: The positive WTP indicates strong community support and a potential revenue stream for ecosystem restoration.
• Targeted Interventions: The results suggest that conservation strategies should be gender-sensitive and family-centered.
• Awareness and Livelihoods: Since education and income positively influence WTP, the paper suggests that strengthening environmental education and improving local livelihoods (e.g., sustainable agriculture, eco-tourism) are prerequisites for maximizing community participation in conservation financing.
• Equitable Payment Schemes: Given that distance and bid size negatively affect WTP, the authors recommend that payment schemes be designed to be fair, affordable, and sensitive to the varying economic conditions and proximity of households to the mountain.

The study concludes that the Choke Mountain community recognizes the value of ecosystem improvements and is willing to contribute financially, provided that management plans are equitable and address the specific socio-economic drivers identified in the analysis.