Economic Valuation of the Use and Non-use Attributes of a Coastal Wetland for Better Management of Its Resources by Prosun Kumar Ghosh MASTER OF SCIENCE IN WATER RESOURCES DEVELOPMENT Institute of Water and Flood Management BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY November, 2010 BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY Institute of Water and Flood Management The thesis titled ‘Economic Valuation of the Use and Non-use Attributes of a Coastal Wetland for Better Management of Its Resources’ submitted by Prosun Kumar Ghosh, Roll No. 1008282002 F, Session: October, 2008 has been accepted as satisfactory in partial fulfillment of the requirement for the degree of Master of Science in Water Resources Development on 29 November, 2010. BOARD OF EXAMINERS .................................................. Dr. M. Shahjahan Mondal Chairman Associate Professor (Supervisor) Institute of Water and Flood Management Bangladesh University of Engineering and Technology Dhaka ................................................. Dr. M. Shah Alam Khan Member Professor and Director (Ex - officio) Institute of Water and Flood Management Bangladesh University of Engineering and Technology Dhaka ................................................ Dr. Md. Rezaur Rahman Member Professor Institute of Water and Flood Management Bangladesh University of Engineering and Technology Dhaka ................................................. Dr. Subrota Kumar Saha Member Associate Professor (External) Department of Geology University of Dhaka Dhaka ii CANDIDATE’S DECLARATION It is hereby declared that this thesis or any part of it has not been submitted elsewhere for the award of any degree or diploma. ……………………….. Prosun Kumar Ghosh Roll No. 1008282002 F Session: October, 2008 iii TABLE OF CONTENTS Title Page No. ACKNOWLEDGEMENT iv ABSTRACT v TABLE OF CONTENTS vi LIST OF TABLES x LIST OF FIGURES xii ABBREVIATIONS AND ACRONYMS xiii CHAPTER ONE: INTRODUCTION 1-6 1.1 Background and Present State of the Problem 1 1.2 Objectives of the Study 3 1.3 Scope and Importance of the Study 3 1.4 Limitations of the Study 4 1.5 Structure of the Thesis 5 CHAPTER TWO: LITERATURE REVIEW 7-23 2.1 General Overview on Wetlands 7 2.1.1 Wetland and its classification in Bangladesh 7 2.1.2 Functions and services of wetlands 7 2.1.3 Conceptual framework for wetland value 10 2.2 Wetland Valuation Methods 12 2.3 Studies on Economic Valuation of Wetlands 15 2.3.1 Studies in Bangladesh 15 2.3.2 Studies in other countries 18 CHAPTER THREE: CHANDA BEEL AND ITS ECOSYSTEM 24-39 3.1 Location of Chanda Beel 24 3.2 Physiography and Topography 26 3.3 Geology and Soil 27 3.4 Hydrology 27 vi 3.4.1 Drainage system 27 3.4.2 Flooding 28 3.5 Land and Water Use 30 3.6 Water Management Interventions and Its Consequences 31 3.7 Chanda Beel Resources 32 3.7.1 Flora 32 3.7.2 Fauna 32 3.8 Beel Dependent Livelihoods 34 3.9 Demography 36 3.9.1 Population and household 36 3.9.2 Education 37 3.9.3 Occupation 38 CHAPTER FOUR: METHODOLOGY AND DATA COLLECTION 40-54 4.1 General Overview of Methods 40 4.2 Methods Applied for Total Economic Valuation of Attributes 41 4.2.1 Methods for valuation of use attributes 42 4.2.1.1 Market analysis 42 4.2.1.2 Income estimation 42 4.2.1.3 Water supply cost 42 4.2.1.4 Replacement cost 42 4.2.2 Method for valuation of non-use attributes 42 4.2.2.1 Contingent valuation method 42 4.2.2.2 Estimation of willingness to pay 44 4.2.2.3 Validity and reliability of CV estimate 45 4.3 Key Informant Interview 46 4.4 Focus Group Discussion 47 4.5 Sampling Design 48 4.5.1 Sampling method and size 48 4.5.2 Sampling unit 49 4.6 Questionnaire Design 50 4.6.1 Pre-testing of the questionnaire 50 vii 4.6.2 Questionnaire finalization and interview strategies 50 4.6.3 Administration of questionnaire 53 4.7 Analysis of Survey Data 53 CHAPTER FIVE: RESULTS AND DISCUSSION 55-91 5.1 Attributes of Chanda Beel 55 5.1.1 Use attributes 55 5.1.2 Non-use attributes 55 5.2 Economic Value of Chanda Beel at Present State 56 5.2.1 Consumptive use value 56 5.2.1.1 Agricultural crops 56 5.2.1.2 Fish 57 5.2.1.3 Snail 58 5.2.1.4 Water lily 60 5.2.1.5 Water hyacinth 60 5.2.1.6 Fuel wood 61 5.2.1.7 Peat 61 5.2.1.8 Bird 62 5.2.1.9 Frog 62 5.2.1.10 Fodder 62 5.2.1.11 Wild vegetable 63 5.2.1.12 Total consumptive use value 64 5.2.2 Non-consumptive use (boat transportation) value 64 5.2.3 Indirect use value 65 5.2.3.1 Groundwater recharge and baseflow contribution 65 5.2.3.2 Flood control 65 5.2.4 Non-use value 67 5.2.4.1 Some characteristics of survey respondents 67 5.2.4.2 Non-use value by ranking method 68 5.2.5 Total economic value 71 5.3 Development of Strategies for Proposed Use of Chanda Beel 72 5.4 Economic Value of Chanda Beel at Proposed State 76 viii 5.4.1 Consumptive use value 76 5.4.1.1 Agricultural crops 76 5.4.1.2 Fish 77 5.4.1.3 Snail 78 5.4.1.4 Water lily 78 5.4.1.5 Water hyacinth 79 5.4.1.6 Bird 79 5.4.1.7 Total consumptive use value 79 5.4.2 Non-consumptive use (boat transportation) value 79 5.4.3 Indirect use values 80 5.4.4 Non-use values 80 5.4.4.1 Contribution of money 80 5.4.4.2 Contribution of time 88 5.4.4.3 Total non-use value 89 5.4.5 Total economic value 90 5.5 Comparison of Total Economic Value 90 CHAPTER SIX: CONCLUSIONS AND RECOMMENDATIONS 92-94 6.1 Conclusions 92 6.2 Recommendations for Further Study 93 REFERENCES 95 APPENDIX-A: Design Parameters and Construction Cost of Polder 102 APPENDIX-B: Sample Questionnaire 105 APPENDIX-C: Sample Checklist 110 ix LIST OF TABLES Title Page No. Table 2.1: Different wetland functions and valuation methods 16 Table 3.1: Monthly average rainfall of the study area 29 Table 3.2: Annual maximum and minimum water level 30 Table 3.3: Distribution of livestock resources in the beel area 34 Table 3.4: Estimated distribution of livestock resources in the beel area 34 Table 3.5: Household and population of the Chanda Beel area 37 Table 3.6: Population by age group and sex in the study area 38 Table 3.7: Literacy rate in the Chanda Beel area 38 Table 3.8: Educational institutions by categories in the Chanda Beel area 39 Table 3.9: Distribution of occupation in the study area 39 Table 4.1: Valuation methods adopted in the study 41 Table 5.1: Plantation and harvesting period of different crops of Chanda Beel 57 Table 5.2: Present net benefit from agricultural crops in Chanda Beel 57 Table 5.3: Fish species, quantity and value in case of full time fishermen 59 Table 5.4: Fish species, quantity and value in case of non-fishermen 59 Table 5.5: Economic value of fodder 63 Table 5.6: Total value of consumptive resources 64 Table 5.7: Age group distribution of the respondents 67 Table 5.8: Education status of the respondents 68 Table 5.9: Occupation pattern of the respondents 69 Table 5.10: Distribution of household income 69 Table 5.11: Respondent’s response to duration of the program 70 Table 5.12: Respondent’s visit to Chanda Beel area 70 Table 5.13: Ranking of the present state of Chanda Beel 71 Table 5.14: Present total economic value of Chanda Beel 71 Tables 5.15: Strategies for better management of wetland resources of the beel 73 Table 5.16: Net benefit from agricultural crops in proposed state 77 x Table 5.17: Fish value for proposed state in case of full time fishermen 77 Table 5.18: Fish quantity and value in case of proposed state for non-fishermen 78 Table 5.19: Total value of consumptive resources in proposed state 80 Table 5.20: Reasons for not willing to contribute money 82 Table 5.21: Results of logit model for non-use values of Chanda Beel 83 Table 5.22: Results of multiple regression model for non-use values 84 Table 5.23: Descriptive statistics of WTP for three regions 86 Table 5.24: ANOVA table for WTP of the three regions 86 Table 5.25: Chi-square test for contributing money 87 Table 5.26: Non-use component values of Chanda Beel 87 Table 5.27: Monetary value of time contribution of the respondents 88 Table 5.28: ANOVA table for willingness to contribute time for three regions 89 Table 5.29: Estimated annual average non-use value of Chanda Beel 89 Table 5.30: Total economic value of Chanda Beel for proposed state 90 Table 5.31: Comparison of total economic value of the two states 91 xi LIST OF FIGURES Title Page No. Figure 2.1: Classification of the total economic value of a wetland 11 Figure 3.1: Location of Chanda Beel 25 Figure 3.2: Physical view of Chanda Beel 25 Figure 3.3: Water coverage area of Chanda Beel 26 Figure 3.4: Canal system of Chanda Beel 28 Figure 3.5: Baira farming in the Chanda Beel area 36 xii ACKNOWLEDGEMENT At first I express my sincere appreciation and deepest gratitude to Dr.