Economic Valuation of Ethiopian wolf in Guassa community conservation area using

contingent valuation methods

1. Background and justification

Ethiopia is one of the mega biodiversity countries of the world. It has 320 species of mammals of
these more than 36 are endemic. The Ethiopian wolf (Canis simensis), also known as the
Abyssinian wolf, red jackal or Simien fox is one of the endemic mammals in Ethiopia (Marino et
al., 1999; Marino et al., 2011). Ethiopian wolf is one of five Canis species present in Africa, and
is readily distinguishable from jackals by its larger size, relatively longer legs, distinct reddish
coat and white markings.

Ethiopian wolves are restricted to afro alpine grasslands and ericaceous heath lands at altitudes
of 3000 - 4000 m (Sillero-Zubiri & Macdonald 1997). There are no recent records of the species
at altitudes below 3,000 m, although specimens were collected at 2,500 m from Gojjam and
north-western Shewa at the beginning of the century (Yalden et al., 1980)

Currently there are six highland areas where the extant Ethiopian wolf populations are found.
North of the Rift valley, the species occurs in the Simen mountain national park in Gondar, in the
northern and southern Wollo highlands, and in Guassa Menz, north Shewa. It has been become
extinct in Gosh Meda in north Shewa and Mount Guna, and has not been reported in mount
Choke for several decades. Southeast of the Rift Valley, it occurs in the Arsi and Bale Mountain.
Today there are no more than 500 individuals distributed in small populations of which Bale
mountains in the southern highlands is the largest with around half of the world population
(Sillero-Zubiri and Gottelli, 1995).

1.1. Population status

The Ethiopian wolf is one of the world’s most endangered canid. Less than 500 individuals are
survived in Ethiopia. Half of these are estimated to live in the Bale mountains national park,
southern Ethiopia, where wolf density is high (Sillero-Zubiri and Gottelli, 1995).

Guasa-Menz community conservation area has total area of 112square kilometer and inhabits
about 23 packs of Ethiopian wolfs in 2009 and the population trend is believed to decline by
40% mainly due to disease (IUCN/SSC Canid Specialist Group, 2011).
 1.2. Wolf threats

The Ethiopian wolf has been considered rare since it was first recorded scientifically. It is likely
that the species has always been confined to Afro alpine habitats, and was thus never
widespread. In historical times, all of the Ethiopian wolf's threats are both directly and indirectly
human-induced, as the wolf's highland habitat, with its high annual rainfall and rich fertile soils,
is ideal for agricultural activities. The main threats of Ethiopian wolf include habitat loss and
fragmentation (subsistence agriculture, overgrazing, road construction and livestock farming),
diseases (primarily rabies), conflict with humans (poisoning, persecution and road kills), and
hybridization with domestic dogs. Nevertheless, canid diseases, particularly rabies, are the most
immediate threat to Ethiopian wolfs.

Thought a lot has been done by the government, non-governmental organization and others in
the conservation of the Ethiopian wolf, however the endangering factors still persists. For
instance, the outbreak of rabies in Bale (Senetti) killed many wolves in August, 2014. The
population of dogs in web valley wandering in the wolf habitat was nearly equal to the number
of wolves available there. This means there is no guarantee that rabies outbreak appears in
wolves and swept away all population.

Ecological resource such as species and habitats, relative values have been formulated in many
ways such as by ranking a species according to the degree of overall threat or decline or
according to its status in one particular area relative to a wider area, whether on a regional or
national scale. (White et al., 1997). These data currently provide the main basis for allocation of
scarce financial resources for conservation. However, such approach takes no account of boarder
values associated with ecological resources, their total economic value, and currencies of
measurements used cannot be incorporated within an economic cost-benefit analysis. In
comparative assessment of different conservation options or in analyzing cost benefits between
development and conservation a total economic approach may have considerable benefits (White
et al., 1997).
Scientists argue that economic criteria need to be a part of the design and implementation of
conservation policies (MEA 2005). Similarly, many institutional programs, such as the
Convention on Biological Diversity recognize the importance of understanding the economic
value of biodiversity for conservation policy making (Mart´in-Lopez et al., 2007). Environmental
economics can inform conservation biologists and policy makers about why species are
endangered, the opportunity costs of protection activities, and the economic incentives for
conservation (Shogren et al. 1999).

People value wild animal species for different reasons and benefits from their protection in
different ways. The total benefits of protection are generally partitioned between those arising
from use or nonuse values which together comprise a species total value (Mathew and Stephen
1996; Gaston and Spicer, 2004).

The total economic value of biodiversity can be categorized into two broad and largely self-
explanatory groups: use values and non-use values (White et al., 1997; Gaston and Spicer, 2004;
Pascual, et al., 2010). The use values include direct, indirect and option-use while the non-use
values are bequest, altruist and existence values (Pascual, et al., 2010).

Direct use values wild animals are outputs that are directly consumable, such as food and
recreations, indirect-use values include activities such as observation and photography.
Individuals may also benefit from indirect uses activities such as enjoyment gained by reading
about or viewing photographs and motions pictures of species (Mathew and Stephen 1996).

The bequest value for a resource is the value of knowing the fact that future generations will
also have access to the benefits from species (intergenerational equity concerns). Altruist value
refers to the fact that other people of the present generation have access to the benefits provided
by species (intergenerational equity concerns) and the existence value refers to the
value/satisfaction of knowing that it continues to exist. The direct and to less extent the indirect
value may have a well-defined monetary component.
The option value and non-use value are typically far more difficult to define with respect to
existing market since non-use values are related to moral, religious or aesthetic properties, for
which markets usually do not exist (Pascual, et al., 2010). Though theses derived values for non-
market benefits may be controversial more efforts should be made to assess them and incorporate
into the decision-making process (White et al., 1997).
Measuring non-market benefits using public willingness to pay is therefore an appropriate
measuring and has been used in previous studies to give meaningful estimates of the
anthropocentric benefits of conserving rare and endangered species (Loomis and White 1996).
Therefore, the aim of this work is to investigate the relative total economic values of different
Ethiopian wolf by evaluating public willingness to pay towards its conservation.

2. Significance of the study

With no doubt wildlife resources has significant role in the contribution of the livelihood of the
community in many parts of the world including Ethiopia. There is no investigate the relative
total economic values of different Ethiopian wolf by evaluating public willingness to pay
towards its conservation Therefore, this study generates guideline to formulate the best policy to
manage Ethiopian wolf.

3. Objectives of the study

3.1. General objectives of the study
General objective of the study is to investigate the economic value of Ethiopian wolf by
contingent valuation methods
3.2. Specific objectives of the study

To identify the economic role of Ethiopian wolf to the community

To examine the willingness to pay of the community to conserve Ethiopian wolf
To identify the determinant of willingness to pay to Ethiopian wolf conservation

4. Materials and methods

4.1. Description of the study area

Guassa community conservation area is located in the Amhara Regional State, within the North
Shewa, Gera-Keya Woreda. Guassa community conservation area is about 265 km northeast of
Addis Ababa and 135 km north of Debre Birhan, the capital of north Shewa Zone, by road. The
capital of Gera-Keya Woreda is Mehal Meda which is 17 km from the Guassa area. Guassa
community conservation area lies at latitude 100 15΄-100 27΄N and longitude 390 45΄-390 49΄E.
The total area of Guassa is 98.45 km2. It forms part of the western edge of the Great Rift Valley
and has altitudinal ranges from 3200 to 3700 m asl.

Guassa supports important and endemic plant species including Guassa grass, gaint
lobelia, Erica moorlands, Helichrysum and Alchemilla species. The Afro-montane vegetation of
the Guassa Area varies with altitude, and is a key attraction of the area. Annual rainfall for
Guassa averages 1,200 mm to 1,600 mm. The area is characterized by mild days and cold nights.
In the driest months (December through February) the daytime temperature can rise to 23 °C
while at night it can fall to −10 °C. There is frequent frost and fog in the dry season. The
temperature variation is less in the wet season with a daytime temperature of 12 °C and a
nighttime temperature of 3 °C.

4.2. Methodology

4.2.1. Sample size determination and data collection

Purposive and multistage stratified sampling methods will be used to collect data from
households. Households the Gera medir woreda will be the sampling frame.

Sample size can be determined by using rules-of-thumb for multiple regression analysis. Rules-
of-thumb have been suggested for determining the minimum number of subjects required to
conduct multiple regression analyses is N ≥ 50 + 8 m Where: N is sample size and m is number
of predictor variables or explanatory variables(Xi) where i= 1,2….15.

Data will be collected through face to face interview using both closed-end and open-end
questionnaire. The questionnaire was designed based on factors which affected the willingness-
to-pay of community and has two parts: (1) Demographic characteristics (gender, age and
education level), social and economic characteristics (family income), distance from the
protected area and others. (2) Willingness-to-pay to of community to the improvements of
Ethiopian wolf. To effectively reduce the understanding deviation, we conducted face-to-face
interviews. Before the actual interview data collectors and selected household will be trained
and focal group discussion will be made by the researcher respectively (Rodgers, 2001).
4.2.2. Data analysis
 The questionnaires data will be carefully checked before being put into the database. After a
meticulous sorting and data cleaning, analyses were performed using Spss 20 software. χ2 test
was used to compare differences in categorical variables. All statistics were performed using a
two-sided test and statistical significance was considered at p < 0.05.

Data will be analyzed using spss version 20 software. Logistic regression model will be used to
determine the significant factor affecting the willingness to pay. Willingness to pay can be
determined by using the following formula.

WTPi =α + βXi +vi

where WTPi is the willingness to pay of individual i, α is some constant, Χi is a vector of
demographic variables, and νi is a normally distributed random term with a mean of zero
and a variance = σ2 (i.e. Vi ~ N (0, σ2)).

5. Work plan
The study will be conducted during the periods of 201/2018
February,2018
January, 2018
October , 2018
January, 2017

March, 2018

April, 2018

June , 2018
No Activities

Week week Week Week Week Week week

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

1. Proposal write up
2. Proposal defense
3. Preliminary survey
4. Data collection

5. Data organization

6. Data analysis

7. Manuscript write-
up
8. Presentation to
stakeholders

6. Budget breakdown
The total cost of the study will be 77.125 birr.

No Individual/person No. of Daily Number of Re

individua payment days Total (Birr) ma
ls rk
1 Per-Diem Researchers 4 600 15 36,000
2 Per-Diem field officers 5 295 22,125 -
(Park wardens)
3 Group discussion 20 200 1 4000
4 Driver 1 295 10,000 -
5 Fuel and lubricants 5,000
total 77,125

7. Collaborating Researchers & Institutions

This assessment will be carried out in collaboration of other stallholders like, universities
(economist) and other nongovernmental organizations that can support logistics and experts as
well.
Recommendations for the use of willingness-to-pay in conservation policy
In the context of very real constraints on public expenditure on wildlife issues in countries
throughout the world, willingness-to-pay techniques are becoming increasingly important as
a supplement to scientific opinion in helping to determine objectives and priorities in nature
conservation. Because of the many factors that can affect the internal validity and consistency of willingness-to-pay values, comparisons between
different studies should be
viewed with considerable caution.(docslid pdf)

Economic values of the otter and the water vole

The relative economic values of the otter and the water
vole were estimated using contingent valuation. This is
the only valuation method that can elicit non-use values
directly (Mitchell & Carson, 1989), and these are likely
to be the most important components of total economic
value for many threatened species. Contingent valuationEconomic value of mammal species in Britain 347
uses direct consumer sampling to estimate the economic
values of non-market "commodities, such as ecological
resources, where there is no corroborating market
behaviour that would allow reliable measurement of the
same values by revealed preference methods (britain mammals pdf)

ctm is survey is technigue, that attempt direct elicitation of individual’s households, preference for good or services. It does this by askining the
respondents in the surevy questions or serioes of questions about how much they vale the goods or services. People ask directly to state or reveal
what they are willingness to pay in order to gain or avoid some in provsiion of goods or services. Alternativley they may be asked what they are
willinngness to accept ot forego or tolerate change (handbook pdf).
There are three well-articulated viewpoints with respect
to the inclusion of passive-use: (a) that passive-use values
are irrelevant to decision making (18), (b) that passive-use
values cannot be monetized but should be taken account of
as a political matter or by having experts decide (19), and (c)
that passive-use values can be reliably measured and should
explicitly be taken into account (20). The first position is
hard to defend from an economic perspective. Failure to
consider passive-use value is clearly inconsistent with
economic theory if the objective is to maximize public welfare
in any well-defined sense as pure public goods would clearly
be under-supplied. The difference between the second and
third position depends largely upon whether one wants the
monetary value the policy-maker placed on the good to be
kept implicit (21) rather than explicitly disclosed, whether
one wants the preferences of experts or the public, and
one’s view on whether CV techniques can be reliably
implemented.(cv user guide pdf)

A CVM survey involves developing a hypothetical market or referendum which an

individual uses to reveal or state his or her WTP for protection of a specific species in a
particular location. The structure of the hypothetical market involves three elements: (1)
description of the speciesJ.B. Loomis, D.S. White/Ecological Economics 18 (1996) 197-206
199 and habitat proposed for preservation--this includes location of habitats and specific
changes in population as well as the consequences of paying or not paying; (2) the form and
frequency of the payment - f o r T & E species, common forms include higher income taxes,
increases in utility bill and payments into a dedicated trust fund; (3) how they are asked
their WTP--i.e., as an open-ended question (e.g., what is the most you would pay?), circling
a dollar amount from a list of alternative figures on a payment card or simply responding
'yes' or 'no' to a single dollar amount (which varies across respondents). This latter
question format is called 'dichotomous choice' or 'referendum' due to its similarity to
voting on a bond issue (Hanemann et al., 1991). See Mitchell and Carson (1989) for a
complete discussion of the CVM methodology (looms and white pdf).

A detailed description of the particular dichotomous choice question measuring willingness

to pay will be presented below. For now, let's assume that an estimation of willingness to
pay from these two sets will take the simple form:
WTPi = α + βX i +ν i (1)
2 Dichotomous Choice: A dichotomous choice question is one to which the
respondent can answer either yes or no. Thus, the willingness to pay question
presented some dollar value that the respondent could either accept or decline.
3 Hypothetical: Throughout the paper I will refer to the surveys that hypothetically
asked the respondents willingness to pay as the "hypothetical treatment."4
Where WTPi is the willingness to pay of individual i, α is some constant, Χi is a vector of
demographic variables, and ν i is a normally distributed random term with a mean of zero
and a variance = σ2 (i.e. ν i ~ N(0, σ2)). The parameters of this regression, α and β, will
then be estimated using the maximum likelihood method. The particulars of the
estimation are discussed in greater detail below (wtp calculation)

Alternative approaches in CVM

 Open-ended (OE): "How much are you willing to pay?"
 Dichotomous choice (DC): "Would you pay £X to improve…?"
 Double-bounded dichotomous choice (DBDC): The dichotomous choice question is
followed up by another dichotomous choice question depending on the previous answer.
This format has been more efficient than its counterpart as more information is collected
from each respondent.
 Iterative bidding (IB): Series of dichotomous (yes/no) choice questions followed by a
final open-ended WTP question. The bidding increases until the respondent says no.
 Payment card (PC): Respondents select their maximum WTP amount from a list of
possible sums presented on a card .

The method of payment

The method of payment includes a number of different aspects: − Choice of benefit
measure. There are four types of benefit measures that can be elicited: (a) WTP to secure
a gain, (b) WTP to avoid a loss, (c) WTA to tolerate loss, and (d) WTA to forgo a gain.
The choice of the benefit measure is rather case-specific and depends on the
characteristics and context of the change valued. It is worth mentioning that the choice of
the measure may impact the resulting valuations. For example, empirical evidence has
shown that WTA responses are substantially higher than the WTP responses, even for
fairly familiar goods of rather low monetary value (Kahneman et al, 1990, Bateman et
al, 1997

(cvm important pdf)

8. Reference

Shogren, J. F., et al. 1999. Why economics matters for endangered species protection.
Conservation Biology 13:1257–1261.

MEA (Millennium Ecosystem Assessment). 2005. Ecosystems and human well-being:

biodiversity synthesis. World Resources Institute, Washington, D.C.

White, C., L, Gregory, K., W., Lindley, P., I. & Richards, G. (1997). Economic values of
threatened mammals in Britain: a case study of the otter Lutra lutra and the water vole Arvicola
terrestris. Biological Conservation 82; 345-354

Opez B.M-L, Crarlos M., and Javier B. (2008). Economic Valuation of Biodiversity
Conservation: The Meaning of Numbers. Conservation Biology:V 22, No. 3,
Mathew, J. K. and Stephen, D. R. (1996) Estimating and questioning the economic values of
endangered species: an application and discussion. endangered species updates; v. 15: n. 5

Mart´in-Lopez, B., Montes, C. and Benayas, J. (2007). Economic Valuation of Biodiversity

Conservation: the Meaning of Numbers. Conservation Biology, Volume 22, No. 3, 624–635

Pascual, U., Muradian, R., Brander, L., Gómez-Baggethun, E., Martín-López, B., and Verma, M.
(2010). The economics of valuing ecosystem services and biodiversity

Gaston, K., J. and Spicer, J., I. (2004). Biodiversity: An Introduction, second edition; Blackwell
publishing

Gaston, K., J. and Spicer, J., I. (2004). Biodiversity: An Introduction, second edition; Blackwell
publishing. PP 91-105

Rodgers, L. (2001). Willingness to Pay an Examination of Nonuse Values