Monetizing the Environmental Welfare Impact of Deforestation in Ogun State, Nigeria: The Contingent Valuation Approach

Abstract

This paper investigated the economic valuation of alternative uses of rainforest land using the contingent valuation approach.  Multi-stage sampling technique was used in the collection of the 260 respondents in the data from the four Ogun State Agricultural Development zones used for the study. Data were analyzed using descriptive statistics and the dichotomous-choice contingent valuation method that terminated into the logit model. Food crop cultivation accounted for 66.4% of deforestation. The households yearly Willingness To Pay/hectare (WTP/ha) for rainforest protection was N16,186.76. This translated to N0.60 billion for the 'average 36,817.62 hectares/year deforested for food crop cultivation. The key determinants of the likelihood to pay for rainforest protection were the bid, rainforest visitation, and immigrant status that had the coefficient of -0.0074. -0.11 and -0.71 and were significant (p<0.01) for bid and (p<0.05) for the others. In addition were the income, educational status and food crop producer status that had the coefficients of 0.13. .0063 and .00012 and were significant (p<0.01). Lower cost of rainforest protection as indicated by the WTP would lead to further deforestation and the consequent environmental impacts for a long time. There is therefore the urgent need for environmental sensitization through education to arrest deforestation.