As suggested by researchers Erkie Asmare....

The choice among the two popular and dominantly used stated preference methods i.e.

contingent valuation (CV) and choice experiment (CE) depends on the nature of the good and

the interest of the researchers. As a distinction, CV askes households’ WTP or WTA using a well-designed hypothetical market scenario about the intervention (Mahieu et al., 2014). This method of valuation estimates households’ WTP for a given intervention by using different

elicitation methods. On the other hand, CE works based on the theory developed

by Lancaster, (1966). This theory states that the good in itself does not give utility for the households but the attributes do. Therefore, households are offered a choice set that are described in terms of specified attributes that the resource provides. Under this method, the choice set usually contains several alternatives and the household chooses the most preferable alternative that is supposed to yield the highest utility (Burgess et al., 2012; Nega, 2012).

Hence, to apply CE, the resource would be described in terms of its attributes like tree and

grass, quality of water, stock of fish and aquatic species, recreation, and other aesthetic

attributes.

As an advantage, CE provides more information about the preferences of the households for

the resource attributes (Burgess et al., 2012). Most importantly, CE method has the potential to

overcome problems, which are inherent in the CVM. In addition, this method helps to evaluate

the marginal effects of different attributes on the households’ welfare (Burgess et al., 2012;

Haltia, 2015). However, CE has a higher cognitive burden on the households, especially if the

number of alternatives and attributes in the choice set are high (Mahieu et al., 2014). In

addition, most of the nonuse values from the resources are difficult to disaggregate in terms of attributes, in this case, applying CE might be misleading (Burgess et al., 2012). As a result, valuation studies using CE method is mostly subject to complexity in experimental design of

the data compared to the CVM. Therefore, the complexity and the less direct nature of CE

method creates difficulty in the selection of attributes and its levels (Nega, 2012).

Given its limitations, many researchers like, Gezahegne (2015), Dameneh et al.

(2016), Nyongesa et al. (2016), Berhan et al. (2017) and Oduor et al. (2018) preferred CVM to

CE to estimate households’ WTP for the restoration of the respective wetlands. Their main reasons were to avoid cognitive burden on the households and its simplicity. Besides its

directness and less complexity, there is also support by NOAA panel (Arrow et al., 1993) to

the use of CVM in the field of environmental resources. CVM takes into account the whole

bundle of the attributes to measure both use and non-use values. This holistic approach has the potential to solve problematic issues like separability and collinearity problem, which are often

associated with other valuation methods. This implies that CVM is perhaps more suitable than

CE in the valuation of resources via for wetlands if the researcher able to draw a well-designed and plausible

hypothetical scenario (Hynes et al., 2011). Therefore, if households have a good understanding about the values of the wetland and the proposed intervention, it is better to ask them directly about the for the biases that might arise

from it.value they attached to the wetland than asking in a circumscribed way (Nega, 2012).