Economic valuation of improved irrigation water use: the case of Meskan District, Southern Ethiopia

Abstract The economic value of water is essential for the rational allocation of the scarce water resource as its availability has become a problem in many countries of the world. This study specifically aimed to assess the households’ willingness to pay decision and to estimate farmers’ willingness to pay for improved irrigation water use. The primary was data collected from 210 households selected through a multistage sampling technique followed by a probability proportional to sample size while it was also supplemented by secondary data. Double-bounded dichotomous choices with follow-up open-ended questions of contingent valuation methods were employed. The result of the study showed that all of the households were willing to pay for improved irrigation water use. The mean willingness to pay for the use of improved irrigation water from the double-bounded dichotomous question of Seemingly Unrelated Bivariate Probit model was Birr 829.46 per year per timad (0.25 ha). On the other hand, the mean willingness to pay from open-ended questions was Birr 726.55 per year per timad (0.25 ha). The respective total aggregate value of improved irrigation water use in the study varies from 33,421,300 birr in open ended to 38,155,160 birr from double bound. Thus, appropriate irrigation water pricing will make the user more aware of the resource scarcity. Therefore, the study suggests a good indicator for the concerned body to invest in expanding the current irrigation projects and introducing proper irrigation water pricing, creating more value for improved irrigation, leading to efficient management of the improved system.