Economic Valuation of Natural Forest: The Case of Hunase Forest, Gibe District, Hadiya Zone, Southern Ethiopia

Abstract

This study was evaluating the economic value of the Hunase forest using a double-bounded contingent valuation method followed by open-ended questions. The sample respondents were chosen using a two-stage stratified random sampling approach. A total of 152 households were surveyed. Both primary and secondary sources were used gather data. The collected data were estimated using descriptive statistics and a bivariate probit econometric model. According to the findings, 71.7% of the respondents were willing to pay for the proposed bid in order to improve forest service. For the first and follow-up bids, the mean willingness to pay for the double-bounded bivariate probit estimate ranged from Ethiopian Birr 58.8 to 51.7 per household per year, respectively. The mean maximum willingness to pay was 47.86 Ethiopian birr. The findings of the bivariate probit model revealed that education level, family size, annual income, and forest benefit have positive and significant effects on willingness to pay for forest conservation, while distance from the forest and bid amounts have negative and significant effects. The aggregate mean willingness to pay is calculated to be Birr 68,614.5 per year using the second bid. The results suggest that the majority of people place a high value on forest protection, implying that natural forest ecosystems are critical to human well-being. To create forest conservation strategies, policymakers should take into account education level, family size, annual income, forest benefit, and distance of the homestead from the forest variables, according to the findings.