Smallholder households’ willingness to pay for sustainable agricultural water supply in case of North West Ethiopia

Agerie Nega Wassihun (), Yitayew Malede Nega (), Wuletaw Mekuria Kebede (), Elleni Ewonetu Fenta () and Asrat Akele Ayalew ()
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Agerie Nega Wassihun: University of Gondar
Yitayew Malede Nega: University of Gondar
Wuletaw Mekuria Kebede: University of Gondar
Elleni Ewonetu Fenta: University of Gondar
Asrat Akele Ayalew: University of Gondar

Letters in Spatial and Resource Sciences, 2022, vol. 15, issue 1, No 5, 79-98

Abstract: Abstract The role of irrigation water pricing as a signal for scarcity and opportunity cost of water plays crucial role in promoting water use efficiency. Therefore, in this study households’ willingness to pay for sustainable agricultural water supply in case of North West Ethiopia was analyzed from October 2019 to December 2020 using 385 sample households selected through systematic random sampling technique. Double bounded dichotomous choice with follow up of open ended format of contingent valuation method were employed. Seemingly unrelated bivariate probit model was used to analyze determinants of households’ probability of willingness to pay. Accordingly, irrigation experience, livestock holding, respondent being male headed, having access to an irrigation input, and having access to market information have positive whereas, age of respondent, distance to market, owning motor pump, rainfall productivity, first and second bid values have negative but statistically significant effect on households’ probability of WTP for sustainable agricultural water supply. The mean WTP of households’ for improved irrigation water supply was estimated 961.68 and 972.66 birr per year/timad (0.25 ha) from double bounded dichotomous choice and open ended format respectively. The aggregate welfare gain of improved irrigation water supply from double bounded dichotomous choice and open ended format was estimated to be 39,068,250 and 39,514,312.5 birr per year respectively. Based on the findings, it is recommended that enhancing farmers’ awareness about resource scarcity and efficient utilization of scarce resource should be prerequisite for effective implementation of sustainable agricultural water charging schemes.

Keywords: Seemingly unrelated bivariate probit; Smallholder households’; Sustainable agricultural water; Willingness to pay (search for similar items in EconPapers)
JEL-codes: Q (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s12076-022-00300-0

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