Determinants of farmers’ willingness to pay for irrigation water use: the case of Agarfa District, Bale Zone, Oromia National Regional State

Meseret Birhane1*, Endrias Geta2

1*Department of Agricultural economics, Addis Ababa University, Fiche, Ethiopia.

2Agricultural Economics and Agribusiness,Haramaya University, Dire Dawa Ethiopia.

2Co-author email: geta.endrias@gmail.com

Accepted January 25, 2015

Citation: Meseret B, Endrias G (2016). Determinants of farmers’ willingness to pay for irrigation water use: the case of Agarfa District, Bale Zone, Oromia National Regional State. Journal of Agricultural Economics and Rural Development, 3(1): 073-078.

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Copyright: © 2016 Meseret B, Endrias G. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are cited.

Abstract

The objective of the study was to analyse determinants of willingness to pay for irrigation water use by individual households. Both primary and secondary data were used for these purposes. The primary data were collected from 120 sample households drawn from two kebeles of Agarfa district. Descriptive and inferential statistics and tobit model were used to analyse the data. The result of tobit model showed that sex of the household, educational level of the household head, total annual income, credit utilization, and perceived trend in rain fed agricultural productivity were positively and significantly related to the probability willingness to pay whereas, family size and initial bid were negatively and significantly related to the probability willingness to pay. Therefore, these variables should be considered while designing irrigation water related projects in the area.

Keywords: Tobit model, Maximum willingness to pay for irrigation water, Initial bid