Economic valuation of water supply service from two community forests in Palpa district

Abstract

Apart from physical products, community forests (CF) in Nepal generate various ecosystemservices that could be important not only to the stakeholders at local level, but also to thestakeholders at the regional and the global levels. Water supply from CF would be one ofthe many ecosystem services whose benefits are provided to the stakeholders. Consideringthe economic importance of water supply service from CF, this study aims to assess theeconomic value of the water supply as a service from two CFs and also identify thefactors affecting an individual's willingness to pay (WTP). Contingent valuation methodwas applied to evaluate the water supply service based on the information of users' WTP.Data from 74 households (HH) in Lipindevi Thulopakho and Jarneldhara CFs in Palpadistrict (surveyed during May-June, 2008) were used. Results indicated that the meanWTP of Lipindevi Thulopakho and Jarneldhara CF users were US$ 36.62 and 25.62 HH-1 yr-1, respectively. The economic value of water supply service from Lipindevi Thulopakhoand Jarneldhara CF were US$ 93.54 ha-1 yr-1 and 134.06 ha-1 yr-1, respectively. Factorslike distance of the house from water source, daily water consumption, wealth status andcaste were associated with substantial influences on an individual's WTP. This studyconcludes that there would be a high possibility for generating extra income with thedevelopment of a payment mechanism for water supply service from CF.Key words: Community forest; contingent valuation; economic valuation; water supply;willingness to payDOI: 10.3126/banko.v20i1.3505Banko Janakari, Vol. 20, No. 1 pp.24-29

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