Agricultural and Resource Economics Review
Economics -- Theory and Research -- Sri Lanka, Ecosystem services -- Economic aspects
The use of stated preference methods in developing countries is growing with the increasing concern about the environment as economies develop. At the same time using monetary payment vehicles and estimating a Willingnessto Pay (WTP) can be problematic in rural or low incomes areas in developing countries. Many respondents in these areas regularly engage in barter and paying with labor and do not use monetary payments for all transactions. This distinction from urban areas with a monetary economy and with most settings in developed countries can impact results from valuation studies as the WTP elicited from rural and low-income areas is likely to be low even though respondents may have a high value and be willing to pay through other means. In response to these concerns, a growing number of stated preference studies explore using both monetary and non-monetary payment options. We contribute to this literature by exploring how the use of monetary vs labor payment options can impact values elicited from choice experiment studies conducted in rural developing country settings. Our application is a choice experiment survey to value restoring an ancient irrigation system know as cascading tank systems in Sri Lankan. The cascading tank systems are designed to complement the surrounding landscape and has parallels to the Japanese land use system of Satoyama. In Sri Lanka, these irrigations systems were created over 1500-2000 years ago but are still functioning today and provide irrigation for nearly 40% of the total irrigable area of the country. At the same time these ancient systems are degrading and there a large number of efforts to restore these systems which the FAO recently identified as a Globally Important Agricultural Heritage Systems (GIAHS). We conduct a choice experiment to understand the WTP/willingness-to-contribute of rural households to restore these irrigation systems. We also contribute to the literature on the applications of choice experiments in developing country settings by comparing data gathering methods, specifically individual surveys vs group information session. We find that in the individual survey settings respondents are more willing to contribute labor (compared to an equivalent monetary payment). Based on the early results we find that there is no difference between the group and individual survey settings when the survey is presented as a monetary payment but for the labor payment treatment, the group setting results in a positive payment coefficient for the labor payment attribute (i.e. respondents are willing to contribute labor when the survey is conducted in a group setting). We are currently exploring the heterogeneity of these results across respondents and plan to include these new results in the presentation as well.
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Dissanayake, S. T., & Vidanage, S. Valuing Ecosystem Services from Restoring Ancient Irrigation Systems: An Application Comparing Labor vs. Monetary Payments for Choice Experiments.