Generation of a compensation mechanism from a dichotomous contingent valuation, Ecuador

Authors

Edison Fernando Campos Collaguazo Fundación Innovadora para el Desarrollo y Fortalecimiento Integral, Espejo y Velóz, Riobamba, Ecuador. https://orcid.org/0000-0002-3285-9907
Luis Alberto Jiménez Díaz niversidad Nacional Agraria La Molina, La Molina Lima, Perú. https://orcid.org/0000-0002-6082-1893
Geraldo Ariolfo Cuadrado Barreto Universidad Técnica de Cotopaxi, Facultad de Ciencias Agropecuarias y Recursos Naturales, Campus Salache Latacunga, Ecuador. https://orcid.org/0000-0002-5728-1953

Keywords:

Contingent valuation; dichotomous model; paramo or moorland; water economy.

Abstract

The páramo is a threatened ecosystem, and the indiscriminate advance of the agricultural frontier is producing the loss of ecosystem services, especially water services. This research estimated the willingness to pay (WTP) of water users in the Municipality of Riobamba to conserve the Chimborazo River Microbasin (MCRCH) water service. Four hundred six surveys were applied using a double-bounded dichotomous contingent valuation method and a maximum likelihood model in Stata software. Four models were developed: single-bound, single-bound with other explanatory variables, double-bound, and double-bound with other explanatory variables, the latter being statistically more significant. It was determined that the WTP is USD 0.84 per month for the conservation of the water service, which will allow for the generation of a compensation mechanism to conserve the MCRCH. The study allows making decisions regarding an economic reward for the conservation of the moorlands that are a source of fresh water and are exploited in the lower parts by users for food, cleaning, and industrial production work such as agriculture and livestock. The users are willing to an increase in the value that increases; if the variable of their housing is included, the cost increases by USD 0.04, recognizing the problem of climate change allows for an increase of USD 0.04.

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