Labor As A Payment Vehicle For The Rangeland Improvement: An Application Of Contingent Valuation Method In Yabello District, Southern Ethiopia

Studies conducted regarding goods and services exhibit a low willingness to pay (WTP) in developing countries. However, many scholars found that this may not be the preference for the good but the result of the choice of payment vehicle. Thus, low WTP for ecosystem conservation may not indicate a low welfare for the ecosystem service. There’s the argument that the choice of the payment vehicles may be needed to obtain exact welfare estimates where there is imperfect substitutability between money and labor. Otherwise, there might occur underestimating of the welfare benefit of ecosystem services. Thus, the ultimate objective of this study is to investigate the labor-as a payment-vehicle by using a CV method and estimating the factors influencing pastoralists’ decision to contribute labor for the rangeland improvement. This study demonstrates it through a rural pastoralists’ choice to elicit their willingness to contribute a labor for the rangeland improvement in Yabello District, southern Ethiopia. A total of 228 sample respondents were selected randomly from the two adjacent Kebeles. Logit model was used to identify the factors that influence pastoralists’ willingness to contribute the labor for the rangeland improvement. The result shows that the endowment of household’s active labor highly influence respondents’ willingness to contribute. In addition to that, variables like sex, age, dominant livelihood activities, livestock holding, perception towards the rangeland improvement, dependency ratio, and initial bid value were significantly influence pastoralists’ willingness to contribute the labor for the rangeland improvement. To sum up, the findings of this study suggest that, just like the monetary value, the labor value can also be used to evaluate the demand of community for the ecosystem services improvement. Thus, employing the labor as a means of payment vehicle for accurate welfare estimations might be a practical alternative, and also giving a chance for the respondents to indicate their willingness to contribute for rehabilitation of degraded ecosystem in developing countries.