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Asian Journal of Agriculture and Development (AJAD) - Call for papers!

Economic Valuation for the Protection of Maasin Watershed Reservation in Iloilo, Philippines

(Philippines), Doctor of Philosophy in Forestry (University of the Philippines Los Baños)

Dissertation Abstract:

 

The study was conducted to estimate the economic value for the protection of the Maasin watershed reservation in Iloilo, Philippines. The Contingent Value Method (CVM) was adopted to measure people’s valuation of watershed protection with willingness to pay (WTP) and willingness to accept (WTA) compensation as measures. Two WTP format methods were used: the payment card, and the openended question. A total of 360 respondents (240 off-site and 120 on-site) were interviewed. Opportunity cost analysis was used to estimate the costs incurred by local residents as a result of watershed protection. Factors affecting WTP was determined using the Tobit (censored regression) model while factors affecting WTA compensation were derived using the multiple regression model.

 

Results showed that the majority (92.92%) of the respondents knew the Maasin watershed reservation. The same number (92.92%) of respondents expressed WTP for the protection of the Maasin watershed reservation while all on-site respondents expressed WTA compensation for the watershed protection.

The mean annual WTP to protect and preserve the Maasin watershed reservation was PHP145.65. WTP bids using two CVM formats were almost similar. For all households in Iloilo, the total social WTP was estimated to be PHP9 million per year.

The mean WTA compensation of the on-site respondents was PHP63,333.34. WTP for the protection of Maasin watershed reservation was significantly affected by household income, civil status, educational attainment of the respondents, and the dummy variables for domestic water consumption, and for households who had experienced floods from the watershed.

Regression analysis showed that WTA compensation was significantly influenced by age of the respondents, number of years in school, household income, farm income, number of bamboo planted, and the dummy for location.

Opportunity cost analysis showed that the average foregone income of the farmers from forest and perennial crops was PHP79,517.78. The WTA and opportunity cost values were almost similar.

The CVM performed well in this study. Thus, it indicated that CVM is a powerful and versatile tool for measuring the economic benefits from non-marketed goods such as watershed.

Similar studies should be conducted in Maasin watershed reservation to estimate and compare the benefits and costs from different levels of watershed protection using other valuation methodologies.