Exploring demand for forestry in Lake Victoria Basin (Western Kenya): An econometric approach

This paper determines the demand for a forestry program amongst rural households in western Kenya. It is based on a field survey with 277 households, using a stratified random sampling approach. The study follows attribute based method to elicit farmers’ preferences. Demand is measured in terms of additional number of trees that a household is willing to plant under different price schedules, including direct economic incentive to plant new seedlings. The mean willingness to plant new trees per household increases from 44 trees when farmers have to pay 10ksh/seedling, to 244 trees when farmers receive a payment of 10ksh/seedling. The paper uses fixed effects, random effects and random effect tobit models to estimate relevant parameters. Hausman specification test is returned insignificant, while implies that random effects specification is not incorrect. Price of seedlings (negative effect), availability of timber species (positive effect), gender of the respondent (men likely to plant more trees than women), and availability of agricultural labor at the household (positive) were all found to be significant. Increase in price of a seedling by 1Ksh reduced demand by nine seedlings, while addition of an adult who works full-time on the family farm will raise the demand for seedlings by 18. Furthermore, farmers in Yala River basin were likely to plant more trees than those in the Nyando River basin.