Estimating the Economic Values of Restricted Monoculture Eucalyptus Plantations: A Choice Modeling Approach

Abstract

Today, evaluating ecological wellbeing and ecosystem services is becoming a great concern towards conserving the natural resource base. Healthy functioning ecosystems have fundamental roles for aiding humankind to lead a healthy life and ensure an improved social welfare. Estimating the non-market benefits of ecosystem services can help experts and the public frame policy directions designed for landscape development. The ecosystem of the Eucalyptus hotspot highlands of northwestern Ethiopia, where this study was carried out, provides services that are essential to changes in the life of the society and biodiversity. However, in recent years, the ecosystem is facing a serious threat from intensive monoculture plantations of Eucalyptus. This has resulted in transformation of the cultural landscapes and a loss of biodiversity. The problem in turn calls for designing appropriate ecological improvement programs. Thus, the current study examined the preferences of residents concerning this area and estimated their willingness to pay (WTP) for the proposed ecosystem improvement programs using a Choice Experiment approach. Data were aggregated from 388 residents using a questionnaire survey in January 2020. The survey contained ecological improvement schemes and a hypothetical event by which respondents expressed their willingness to pay a yearly utility fee as a compensation for the improvement programs. Results showed significant differences in resident preferences towards the proposed ecological improvement attributes. The findings also indicated that the socioeconomic backgrounds of residents contributed for the heterogeneity in their WTP for ecological improvement schemes. Accordingly, the marginal willingness to pay of residents was USD 205/person/year for the respective ecological improvement attributes. The findings suggest that policy makers should consider such attribute-based public preferences while planning landscape development and conservation programs. This study can provide vital policy implications and contribute to knowledge as it presents how the non-market valuations of ecosystems help maximize social welfare.