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Accounting for user expectations in the valuation of reliable irrigation water access in the Ethiopian highlands

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  • Kassahun, Habtamu Tilahun
  • Nicholson, Charles F.
  • Jacobsen, Jette Bredahl
  • Steenhuis, Tammo S.

Abstract

We estimate the willingness-to-pay (WTP) for reliable access to irrigation water for a sample of farmers in a watershed of the Ethiopian highlands who do not have prior experience with irrigation. To address the lack of previous irrigation experience, we account for underlying expectations of future irrigation productivity using an Integrated Choice and Latent Variable (ICLV) econometric model. We then compare the ICLV estimates with alternative models that do not account for expectations regarding productivity increases with irrigation. Our results indicate that both the ICLV and alternative provide similar conclusions with respect to the mean WTP for reliable irrigation water access. However, ignoring farmers’ perceptions would understate the uncertainty of the mean or aggregate WTP.

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  • Kassahun, Habtamu Tilahun & Nicholson, Charles F. & Jacobsen, Jette Bredahl & Steenhuis, Tammo S., 2016. "Accounting for user expectations in the valuation of reliable irrigation water access in the Ethiopian highlands," Agricultural Water Management, Elsevier, vol. 168(C), pages 45-55.
    • Handle: RePEc:eee:agiwat:v:168:y:2016:i:c:p:45-55
    DOI: 10.1016/j.agwat.2016.01.017
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    4. Ssebaggala, Moses & Karuaihe, Selma T., 2023. "Evaluating households’ willingness to pay for private water supply services in Wakiso District, Uganda," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 18(1), May.
    5. Manhique, Henrique & Wätzold, Frank, 2023. "Effects of Institutional Setting on Value Estimates of Stated Preference Surveys in Developing Economies: A Discrete Choice Experiment on Conserving Biodiversity in The Cape Floristic Region," MPRA Paper 118750, University Library of Munich, Germany.
    6. Kassahun, Habtamu Tilahun & Jacobsen, Jette Bredahl & Nicholson, Charles F., 2020. "Revisiting money and labor for valuing environmental goods and services in developing countries," Ecological Economics, Elsevier, vol. 177(C).
    7. Riccardo Scarpa & Claudia Bazzani & Diego Begalli & Roberta Capitello, 2021. "Resolvable and Near‐epistemic Uncertainty in Stated Preference for Olive Oil: An Empirical Exploration," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(2), pages 335-369, June.
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