Economic Valuation of Riparian Habitats Protection in Nairobi County Kenya

Abstract

Riparian habitats (RH) provide aesthetic beauty, clean water and environment among others. Despite these values, RH have been threatened and destroyed by effects of human encroachment among others. RH functioning has been hindered despite various state interventions towards RH protection. The habitats have continued to act as dumpsites. From literature, no study has valued RH protection in Kenya. Therefore, this study aimed to carry out economic valuation of RH protection in Nairobi County, Kenya. Specific study objectives were to determine the effect of changes in: Elicitation Format (EF), Bid Range (BR), Payment Vehicle (PV) and the Valuation Good (VG) all on valuation estimates. Welfare economics and utility maximization theories were utilized. Contingent valuation method (CVM) elicited households‘ willingness to pay (WTP) and its standard deviation (SD). 16 locations were purposively selected for study and stratified into 2 subsamples based on EF, with each subsample further stratified into public and private categories.Within these categories, there were six strata each (Trust, Tax, Raised bid, Lowered bid, Public good, Private good). Stratified proportionate random sampling was used to sample 1000 households. Cross–sectional survey design and experimental cards (Stochastic payment card (SPC) and multiple bound discrete choice (MBDC) generated the data. Primary and secondary data sources were used. Data were collected through structured questionnaires. Two stage random valuation model aided data analysis. Data were processed in STATA and subjected to Mann- Whitney test (MWT) and F test statistics. 64% of households were male, older (>38 years) with mean income of KES. 50,444/Month. 71.8% of households attained post college education level and had smaller family sizes (<4 households) hence found it necessary to protect RH (95%). SPC households expressed lower but consistent WTP values (KES.925.1±48.3) at (p<0.01; MWT=2.717), indicating that such households would consistently make their payments towards protection. Change in EF from SPC to MBDC increased both WTP and its SD by 6.7% and 9.8 % respectively at p<0.01. Raised BR exhibited higher and consistent WTP (KES.1166.6±1003.3). A finding contrary to economic theory where WTP rise with reduction in bid amounts. Regression of change in BR on its estimates, increased WTP and reduced SD respectively by 23.7% and 19.4% at p<0.01. Tax PV showed higher WTP and SD (KES.1180.93.1±1332.6) at (p<0.1; MWT=1.865), evidence that it does not elicit protest responses as noted in the literature. The view of RH as public good elicited higher and inconsistent WTP (KES. 1022.1±1318.5) at p>0.01. Regression of change in VG from Private to Public on VG estimates increased both WTP and SD by 9.9% and 7.9% respectively at p<0.01. Factors: - Age, Distance, income, Necessity to protect RH, EF, significantly affected valuation estimates. In conclusion, households expressed positive WTP amounts towards RH protection. The participation of women, youth, and larger families in protection was limited hence need for sensitization. SPC proved desirable for future valuation given its understated welfare estimates. Change in BR led to households‘ true valuation of RH protection. Tax PV was preferred for valuation of RH protection due to the distrust expressed by households over the Trust fund. Households viewing RH as private expressed confident support for it. It is suggested that conservationists and natural resource management authorities, such as the Kenya National Environment Management Authority (NEMA), should focus on increasing the participation of women, youth, and larger families in RH protection efforts through targeted awareness campaigns. Incorporating SPC format in future RH valuation studies is essential for ensuring consistency in households' WTP estimates. Utilization of Lowered BR in future valuation studies could produce more accurate and motivating WTP estimates, particularly for areas like Karura Forest. County governments are encouraged to establish a voluntary environmental tax fund for RH protection, ensuring transparency to build public trust. The study also advocates for using tax preferences as a PV in future valuations of environmental goods and services. Leasing public RH by the government to private entities for enhanced protection is also encouraged. Moreover, VG estimates could inform budget and policy proposals for managing various public RH, with adjustments made to ensure socio-demographic equity. Finally, future RH protection strategies should be tailored to consider key factors such as age, distance, income, and perceived necessity, which significantly influence valuation estimates.