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Demand for Watershed Services: Understanding Local Preferences through a Choice Experiment in the Koshi Basin of Nepal

Author

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  • Rajesh Kumar Rai
  • Mani Nepal
  • Priya Shyamsundar
  • Laxmi Dutt Bhatta

Abstract

In this study, we undertake a choice experiment in order to identify differences in local demand for watershed services in the Koshi basin of Nepal. We first examine the possibility of using a non-monetary numéraire to estimate household willingness-to-pay for watershed services. Survey results indicate that while some 50% of the population is willing to pay in monetary terms for environmental services, this number goes up to 75% when asked to contribute in labor time. Social benefits from environmental services are 1.4 to 2.2 times higher in labor hours relative to benefits estimated in monetary terms. Thus, in developing countries, households are more likely to express their demand for watershed services by offering their time rather than making a monetary payment. Our results also suggest that locational differences matter. Down-stream community members, who practice commercial vegetable farming, have a higher demand for watershed services and are willing to pay a third more than upstream farmers for these services.

Suggested Citation

  • Rajesh Kumar Rai & Mani Nepal & Priya Shyamsundar & Laxmi Dutt Bhatta, "undated". "Demand for Watershed Services: Understanding Local Preferences through a Choice Experiment in the Koshi Basin of Nepal," Working papers 89, The South Asian Network for Development and Environmental Economics.
    • Handle: RePEc:snd:wpaper:89
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    1. Meginnis, Keila & Hanley, Nick & Mujumbusi, Lazaaro & Lamberton, Poppy H.L., 2020. "Non-monetary numeraires: Varying the payment vehicle in a choice experiment for health interventions in Uganda," Ecological Economics, Elsevier, vol. 170(C).
    2. Khanal, Uttam & Wilson, Clevo & Lee, Boon & Managi, Shunsuke, 2017. "Influence of payment modes on farmers’ contribution to climate change adaptation: understanding differences using a choice experiment in Nepal," MPRA Paper 107430, University Library of Munich, Germany.
    3. Xiaoping Zhou & Lan Yang & Xiaokun Gu & Lufa Zhang & Li Li, 2022. "Scarcity Value Assessment of Ecosystem Services Based on Changes in Supply and Demand: A Case Study of the Yangtze River Delta City Cluster, China," IJERPH, MDPI, vol. 19(19), pages 1-20, September.
    4. Chaudhary, Sunita & McGregor, Andrew, 2018. "A critical analysis of global ecosystem services (Paristhitiki sewa) discourse in Nepal," Land Use Policy, Elsevier, vol. 75(C), pages 364-374.
    5. Bryan, Brett A. & Ye, Yanqiong & Zhang, Jia'en & Connor, Jeffery D., 2018. "Land-use change impacts on ecosystem services value: Incorporating the scarcity effects of supply and demand dynamics," Ecosystem Services, Elsevier, vol. 32(PA), pages 144-157.
    6. Ram Prasad Acharya & Tek Narayan Maraseni & Geoff Cockfield, 2020. "An Ecosystem Services Valuation Research Framework for Policy Integration in Developing Countries: A Case Study from Nepal," Sustainability, MDPI, vol. 12(19), pages 1-15, October.
    7. Rajesh K. Rai & Mani Nepal & Laxmi D. Bhatta & Saudamini Das & Madan S. Khadayat & E. Somanathan & Kedar Baral, 2019. "Ensuring Water Availability to Water Users through Incentive Payment for Ecosystem Services Scheme: A Case Study in a Small Hilly Town of Nepal," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(04), pages 1-26, October.
    8. Nthambi, Mary & Markova-Nenova, Nonka & Wätzold, Frank, 2021. "Quantifying Loss of Benefits from Poor Governance of Climate Change Adaptation Projects: A Discrete Choice Experiment with Farmers in Kenya," Ecological Economics, Elsevier, vol. 179(C).
    9. Shrestha, Sujata & Shrestha, Uttam Babu, 2017. "Beyond money: Does REDD+ payment enhance household's participation in forest governance and management in Nepal's community forests?," Forest Policy and Economics, Elsevier, vol. 80(C), pages 63-70.
    10. Laxmi Dutt Bhatta & Arati Khadgi & Rajesh Kumar Rai & Bikram Tamang & Kiran Timalsina & Shahriar Wahid, 2018. "Designing community-based payment scheme for ecosystem services: a case from Koshi Hills, Nepal," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 20(4), pages 1831-1848, August.
    11. Das, Saudamini & Nepal, Mani & Rai, Rajesh K. & Bhatta, Laxmi D. & Khadayat, Madan S., 2019. "Valuing water provisioning service of Broadleaf and Chir Pine forests in the Himalayan region," Forest Policy and Economics, Elsevier, vol. 105(C), pages 40-51.
    12. Kunwar, Samrat B. & Bohara, Alok K. & Thacher, Jennifer, 2020. "Public preference for river restoration in the Danda Basin, Nepal: A choice experiment study," Ecological Economics, Elsevier, vol. 175(C).
    13. Juan F. Velasco-Munoz & José A. Aznar-Sánchez & Marina Schoenemann & Belén López-Felices, 2022. "The economic valuation of ecosystem services: bibliometric analysis," Oeconomia Copernicana, Institute of Economic Research, vol. 13(4), pages 977-1014, December.
    14. Jagath C Edirisinge, "undated". "Distributional Impact of Climate Change on Smallholder Agriculture in Sri Lanka," Working papers 107, The South Asian Network for Development and Environmental Economics.

    More about this item

    Keywords

    Choice Experiment; Labor Contribution; Mode of Payment; Opportunity Cost of Time; Watershed Services;
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