Abstract
There is growing concern globally to conserve natural systems including watersheds due to increasing forest degradation and deforestation. The Barekese and Owabi watersheds provide several ecosystem services to communities, health facilities and industries. The watersheds are found in a rapidly degrading environment due to increasing anthropogenic activities. This paper addressed the neglected, but critical, question of the importance of watershed ecosystem services. The objective of the study was to determine willingness of households in downstream communities to pay for watershed conservation and the drivers of WTP. Households were willing to pay a mean of $1.5 ± 0.2 additional on their monthly water bills. Quotations for Willingness to pay varied from as low as $0.02 to as high as $ 20.58 per month. Age, household size and years of residence were significantly related with willingness to pay, amount to pay and reasons for protest bids. The younger generations and women were ready to pay extra amount for watershed management. The results indicated that downstream communities are willing to support conservation and that demographic factors influence the amount people are willing to pay. The concept of WTP is useful and applicable to conservation of watersheds in the tropics through the design and implementation of PES schemes. It also provides important information for conservation and development policies related to watershed management in developing countries.