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Estimating the economic value of climate services for strengthening resilience of smallholder farmers to climate risks in Ethiopia: A choice experiment approach

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  • Tesfaye, Abonesh
  • Hansen, James
  • Kassie, Girma Tesfahun
  • Radeny, Maren
  • Solomon, Dawit

Abstract

This study estimated the economic value of agricultural climate services for strengthening the resilience of smallholder farmers to climate variability and risks in Ethiopia. Using a choice experiment approach, the study introduced a hypothetical package of improved climate services to 600 randomly selected smallholder farmers in three districts across three different agro-ecological zones in the Oromia Regional State. A generalized multinomial logit (G-MNL) model was used to estimate preferred attributes of climate services and willingness-to-pay (WTP) values. The results show that the preferred bundle of improved climate services among smallholder farmers was one that could be communicated in short text message system, provided along with credit facility, and market information and one that favors participatory decision making by smallholders. The results further reveal that the WTP value exhibited high implicit price for participatory decision-making. The study sheds light on important characteristics of agricultural climate services that may improve their acceptability and usability among smallholders. It also highlights the importance of packaging additional services including digital and ICT-based solutions, financial and market information along with climate services to promote demand-driven last mile delivery systems. Engaging smallholder farmers in a participatory manner in the decision-making process can help them make informed decision.

Suggested Citation

  • Tesfaye, Abonesh & Hansen, James & Kassie, Girma Tesfahun & Radeny, Maren & Solomon, Dawit, 2019. "Estimating the economic value of climate services for strengthening resilience of smallholder farmers to climate risks in Ethiopia: A choice experiment approach," Ecological Economics, Elsevier, vol. 162(C), pages 157-168.
    • Handle: RePEc:eee:ecolec:v:162:y:2019:i:c:p:157-168
    DOI: 10.1016/j.ecolecon.2019.04.019
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    2. Nawab Khan & Ram L. Ray & Hazem S. Kassem & Muhammad Ihtisham & Abdullah & Simplice A. Asongu & Stephen Ansah & Shemei Zhang, 2021. "Toward Cleaner Production: Can Mobile Phone Technology Help Reduce Inorganic Fertilizer Application? Evidence Using a National Level Dataset," Land, MDPI, vol. 10(10), pages 1-19, September.
    3. Danna Shen & Wang-Fang Shi & Wei Tang & Yan Wang & Jun Liao, 2022. "The Agricultural Economic Value of Weather Forecasting in China," Sustainability, MDPI, vol. 14(24), pages 1-11, December.
    4. Agúndez, Dolores & Lawali, Sitou & Mahamane, Ali & Alía, Ricardo & Soliño, Mario, 2022. "Development of agroforestry food resources in Niger: Are farmers’ preferences context specific?," World Development, Elsevier, vol. 157(C).
    5. Danna Shen & Xiaofeng Zhao & Leyi Chai & Zhuanzhuan Guo & Chunxiang Leng, 2024. "Analysis of the agricultural economic value of a weather forecasting service based on a survey of peasant households in Chinese provinces," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-7, December.
    6. Jiaxu Ling & Yongji Xue & Chenyujing Yang & Yuanyuan Zhang, 2022. "Effect of Farmers’ Awareness of Climate Change on Their Willingness to Adopt Low-Carbon Production: Based on the TAM-SOR Model," IJERPH, MDPI, vol. 20(1), pages 1-17, December.
    7. Hye-Min Kim & In-Gyum Kim & Byunghwan Lim & Seung-Hoon Yoo, 2021. "Estimating the Economic Value of Improving the Asian Dust Aerosol Model in the Korean Household Sector: A Choice Experiment," Sustainability, MDPI, vol. 13(21), pages 1-11, November.

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