Determinants of Households’ Willingness to Pay for Watershed Protective Services in Langat Basin, Malaysia

Abstract

The monetary value of watershed protection services has often been overlooked and underestimated in land-use decisions aimed at sustainable management. Payment for Ecosystem Services (PES) is emerging as a viable tool for protecting and conserving ecosystems by providing financial incentives. PES highlights the potential of watershed services as an economic instrument that supports sustainable land management and financing conservation efforts, involving households at the national level to protect watershed ecosystems. This study examines eliciting households’ willingness to pay (WTP) for watershed ecosystem services for sustainable watershed management through a conservation fund added to a monthly water bill. The total sample in the Langat Basin area was 540 covering 12 districts in Selangor state of Malaysia. Primary data were collected from the households Langat Basin using a structured questionnaire through face-to-face interviews. The study outcomes demonstrated that the mean and median willingness to pay by the respondents in Langat catchment area is RM31.05 and RM25.30 for binominal probit model and mean and median WTP is RM 32.25 and RM26.90 for binary logit model. This analysis was conducted based on the willingness to pay 540 households of the Langat watershed. Found that occupation, certainty, PES program, importance of protecting ES, reason for PES program and bid are statistically significant towards willingness to pay for watershed protective services in Langat Basin. PES for watershed ecosystem services in Langat Basin may offer an additional source of income for the state governments.