Public preference for river restoration in the Danda Basin, Nepal: A choice experiment study

This paper develops a choice experiment method to assess the potential for sustainable management of a freshwater system, the Danda River, in Nepal. We use a primary survey data from 637 households, and the empirical analysis is conducted using the Generalized Multinomial Logit (GMNL) model. The findings indicate substantial demand for restoration of the Danda River, and it is indicative of the local public's preferences for an improvement in the Danda river ecosystem. Households were willing to pay up to $1.63/year to move away from the status quo level of services in the Danda River. Our analysis incorporates the respondents' preference uncertainty, and we also explore the presence of spatial heterogeneity using the method of hot spot analysis. We find the inclusion of preference uncertainty slightly increased the precision of the marginal willingness to pay estimates, while the hot spot analysis indicates that heterogeneity in preferences for the ecosystem services surfaces primarily from an urban center. Finally, results also indicates that households prefer community-based management of the Danda River, which highlights the need for policymakers to decentralize their management to the local communities so as to enhance interest in conservation of common pool resources like river ecosystems.