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 contin-
gent valuation approach. Multi-stage sampling technique was used in the collection of the 260 respon-
dents 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 culti-
vation. 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 environ-
mental sensitization through education to arrest deforestation.