Households Willingness to Pay for Camel Milk in Aba'ala Woreda, Afar Regional State.

Abstract

Although camel’s milk is known for its various economic and health benefits, unlike the live camel, there is no market for it in Aba'ala woreda. In this study, the researcher have attempted to investigate how much value the households can assign (willing to pay) for camel milk and the determinants of willingness to pay (WTP) for it using a Contingent Valuation Method. The CVM was based on face to face interview and the surveyed sample households were asked doublebounded dichotomous choice questions followed by open-ended questions to elicit their WTP for camel milk. Out of the total 250 sample households only 3 were not willing to purchase and the remaining 247 were willing to purchase. In this study, three econometric models; Tobit, Probit and Bivariate Probit models were employed. The result from the Tobit model revealed that households' income, age, remittance and the randomly offered bid positively affected households' maximum WTP for camel milk. On the other hand, age square affects households' maximum WTP for camel milk negatively. In the Probit model, the main determinants of the households' probability of accepting the randomly assigned bid are income, remittance, age, age square, the randomly offered bid, education of the household head and adult ratio. Income of the household, remittance, age of the household head and education level of the household head positively and significantly affects the probability of accepting the randomly offered bid by the sample households. On the other hand, age square, the randomly offered bid and adult ratio negatively and significantly affects the probability of saying "yes". In this study the Bivariate Probit model was employed to verify the statistical efficiency gain of the double-bounded over the singlebounded dichotomous choice model. Therefore, it is found that the double-bounded dichotomous choice model does not increase statistical efficiency over the single-bounded dichotomous choice model. Hence, we can employ the single-bounded dichotomous choice model instead of the double-bounded dichotomous choice model.