Factors Affecting Saffron Farmer's Willingness to Pay for Groundwater (Case of Zaveh Plain - Torbat Heydarieh)

The bulk of water extraction from Zaveh-Torbat-e Heydarieh plain in Khorasan Razavi province be harvested by wells and extracted water are used mainly in agriculture.In the past few years, reduced rainfall and increased exploitation of groundwater resources has caused sharp drop in groundwater level. This attention to demand management approach in the exploitation of the water resources is necessary. In this regard, this study examines thefactors affecting saffron farmer's willingness to pay for the use of groundwater using contingent valuation and Heckman’s two stage model. Data are collected using two-step random clusters method and completing questionnaires by 122 saffron farmers in 2015. The results showed that the average amount of their payments for underground water is estimated to be around 220 thousand of Rials per hour. The first stage of Hackman model showed that the level of education, saffron acreage, and the ratio of saffron earnings to average annual income had a significant positive influence on the probability of willingness to pay for underground water and in the second stage of Heckman model education and saffron yield had a significant positive effect and farmer's age had a significant negative effect on willingness to pay.