Evaluating the Role of Payment Vehicles in the Non-market Valuation of Riparian Habitat Protection in Kenya

Abstract

Riparian habitats (RH) have been known for provision of essential service (Environmental conservation, scenic beauty and recreation) among others. In Kenya, these habitats are under pressure from human encroachment. Recently, the Kenya National Environmental Management Authority (NEMA) demolished structures along RH to promote their health. The intervention could be rational with economic and environmental implications on RH protection, but empirical evidence is lacking. Therefore, understanding the role played by payment vehicle (PV) in valuation of welfare estimates could explain the observed behavior. Multistage sampling design was used to sample 774 households. Stochastic Payment Card (SPC) and Multiple Bound Discrete Choice Payment Card (MBDC) generated the data. Data were: - collected through interview schedule, analyzed using two stage random valuation model and processed with STATA. Tax exhibited a consistent and higher mean WTP value than Trust. Determinants (Age, Gender, Income, Necessity to protect RH (NPRH), Distance, Household size, Certainty of future incomes (CFI), Elicitation Format (EF) and PV significantly influenced WTP values. Standard deviations of WTP distributions were significantly influenced by (Distance, Education level, Age, EF, Change in PV, CFI, Household size, NPRH and Land ownership). Change in PV influenced welfare estimates at 1% significance level, thus rejection of overall null hypothesis (Changing the PV does not significantly affect individual welfare estimates towards RHP in Kenya). The Kenyan residents were willing to pay positive amounts for RHP and were supportive of the Tax fund given that it exhibited higher and consistent WTP estimates contrary to what is desirable in contingent valuation studies. Moreover, Tax as a PV worked well with SPC data generation format even though it overstated the WTP values, the estimates were consistent.