This study conducted a contingent valuation survey in Wondo Genet area to elicit households’ willingness to pay for improved irrigation water management. A sample of 154 households were randomly selected and interviewed. Probit models were applied to determine the mean and factors affecting willingness to pay. The econometric result shows that the total willingness to pay estimated from the double bounded elicitation method was computed at 1,476,916 labors per annum for five years (i.e. $3,203,721.8 per year). While, from the open ended elicitation method willingness to pay was computed at 833,144 labors ($1,807,253.96 per year). The total annual WTP from double bound elicitation method was greater than from open ended elicitation method. This might be due to anchoring effect from the double bounded method. This study also empirically proved that monthly income, age, total farmland holding, initial bids, perception, total family size and tropical livestock units are the key determinants of demand for the resource. Therefore, significant socio-economic variables should also be considered while designing water related projects at household level.
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