Assessing willingness to accept a compensation for evicted land in peri-urban areas: A contingent valuation method

Urban expansion in developing countries like Ethiopia is causing political turmoil in peri-urban areas due to inadequate compensation for evicted farmers because of the absence of a land market, which is prohibited by Ethiopia's land policy. This paper applies the contingent valuation method to measure the compensation value considered acceptable to those who are evicted from their farm land. The west Gojjam and Awi zones of Amhara region, Ethiopia are chosen for the case study based on 393 completed questionnaires. It has been demonstrated that a willingness to accept compensation is essential for maintaining sustainable livelihoods. The study applied single-bounded contingent valuation and double-bounded contingent valuation methods to estimate the mean willingness to accept compensation value. Based on the finding, double-bounded contingent valuation could be more optimal for the welfare of the evictees in detecting and correcting respondent's bias due to its narrow confidence interval. Pilot survey was employed to ensure reliability and validity of the methods employed. Therefore, the optimal bid vector for multiplying the average land output preceding three years of eviction is 29.27. Additionally, variables such as initial bid, age, education, and total annual income significantly affect the willingness to accept compensation. The study recommends that federal and local governments should provide adequate compensation offers that prioritize the well-being of peri-urban communities during urban expansion programs, as farmers are losing their most valuable asset. This is crucial for sustainable living and poverty reduction among those who have been evicted.