Abstract:
This paper uses a cross-sectional survey data of 379 randomly selected households in
ArbaMinchZuriaworeda to determine the mean willingness to pay (WTP) of farmers for crop
insurance. We used a technique of contingent valuation method to determine economic valuation
and purposive sampling technique are used to select sample household in the area. Both primary
and secondary data source were used from three kebeles (i.eGentakanchame,GentaBonke,and
Kola Shara) in the study area it is applied statistical descriptive and Econometric probit
regression model to analysis the data. Accordingly we got a result that income, age and
education level significantly affect the household willingness to pay for crop insurancein the
same direction with the change in covariate and household sex, irrigation usage and saving habits
significantly affect the household willingness to pay for crop insurance in the opposite direction
of change in the covariates.
Finally,it is recommended that based on the analysis madethatEducation Level, Sex and saving
habit of the household has big marginal effect so that awareness creation among stakeholders has
to be focused on their relationship.
