THE IMPACT OF EU-ACP ECONOMIC PARTNERSHIP AGREEMENT (EPA) ON THE ETHIOPIAN ECONOMY: A RECURSIVE DYNAMIC CGE APPROACH
Creators: name: Wondale, Meseret
Publisher: name: National Academic Digital Repository of Ethiopia
Year: 2010

description: Wondo Genet Recreation Site is one of the most well-known nature based recreation sites in Ethiopia. The main attractions of the site includes; the hot spring water for bathing and swimming; the forested landscape, streams, birds and other wildlife in the surrounding; and the cafteria, bar and bed room services. The natural ecosystem of the area can be described as wetland which can be categorized under fresh water or geothermal springs or streams and creeks category according to RAMSAR classification of wetland types. Despite the many sources of attractions, the site has been unable to improve the qualities of recreation experience and expand the types and varieties of its recreational services for a long period of time mainly because of lack of sustainable income from internal sources. Moreover, considerable conversion of the natural ecosystem into other land uses has occured, and recurrent occurences of fire and illegal overexploitation of timber has been going on in the subcatchement, where the recreation site is part of the area suffered by the impacts. The value of the site interms of its recreation service to society is not known. It is therefore an important step how much value people attach to the site so as to demonstrate how the respective authorities can extract revenue out of the excess benefit to stregethen conservation efforts, improve qualities and expand the types and varieties of their services. To attach quantitative estimates to the on-site recreational benefit of Wondo Genet Recreation Site, the study applied two standard procedures in Environmental Economics, i.e. Travel Cost and Choice Experiment Methods, using primary data collected from a survey of 192 visitors at Wondo Genet recreation site. The Travel Cost Method used the amount of money and time people spend getting to the site to derive the demand function for the site, which in turn was used to calculate recreational benefits associated with the site. Like other similar studies, travel costs, visitor's income, cost of accessing a substitute site, education and acquaintance with the site were identified as major determinants of visits to the site. Using the Maximum Likelihood estimators of truncated models, the annual on-site recreational benefit of the site was estimated to be Birr 7,899,301 per year. On the other hand, the Choice Experiment Method was used to estimate the value of improvement of the site's quality in general in terms of the attributes selected i.e., three recreational attributes (forest, recreational quality and general service) and one monetary attribute (gate fee). Multinomial and random parameter logit models were used for estimation. All the attributes included were significant factors in affecting the probability of choosing an alternative scenario. Visitors were concerned about the recreational quality attribute i.e., they give higher value to the construction of additional swimming pools and toilet facilities than the forest and general service attributes. This was implied by their marginal willingness to pay for the attributes. The marginal willingness to pay for recreational quality attribute was Birr 7 per visit while for general service attribute it was Birr 2.93 per visit. Low willingness to pay is observed for improvement in the degraded plantation of the site. Moreover, compensating surplus estimates which reflect overall willingness to pay for a change from the status quo (current situation) to alternative improvement scenarios were calculated. The estimate for the high impact scenario was estimated to be Birr 44, for medium impact scenario Birr 37 and for low impact scenario it was Birr 22 per visit. The results of this study indicates that even the conservative estimate of the economic value of recreation benefit from the site is very big and it also indicates that the domestic recreation demand to the site is high. Therefore, it can be suggested that alleivating the major problems that reduce the quality of the site and supporting improvement and expansion projects by extracting revenue out of the excess benefit are essential. Key Words: Travel Cost Method, Choice Experiment, Recreational Wetland Ecosystem, Economic Value, Swimming, Forest, General Service, Gate fee, Willingness topay, Valuation. The