Factors of Demand and Supply for Improved Watershed Services in a PES Intervention in the Blue Nile Basin, Ethiopia

Befikadu A. Legesse, Terrence W. Thomas   

Abstract: The Blue Nile Basin is harshly degraded mainly due to human intervention, which is characterized by high run-off, soil erosion, salinity, water quality/quantity deterioration, heavy floods, sediment deposition etc. Alternative watershed management interventions need to be implemented on the upperpart of the Basin to maintain supply of sustainable watershed services. However, implementation of such intervention might be determined by demand/WTP and supply/WTA of the services. Accordingly, demand and supply of the services need to be investigated prior to implementation of PES intervention. The main purpose of this study is to investigate factor of demand and supply for improved watershed services to design better PES intervention. Data was collected from secondary and primary sources, 601 respondents were interviewed from (300) downstream and (3001) upstream stratum. Choice experiments, nested logit model and descriptive statistic were employed. Policy implications for a better watershed management in PES intervention are made based on the results.

Key words: choice experiments; demand for improved watershed services (willingness-to-pay); improved watershed management; supply of watershed services (willingness-to-accept); policy

JEL code: Q5