Developing a Demand–compensation Model for Forest Ecosystem Services: Evidence from Nandi South Forest, Kenya

Abstract

Forest ecosystems provide important environmental and socioeconomic benefits to surrounding communities, yet inadequate compensation mechanisms may undermine their long-term conservation. This study developed a demand compensation model to examine household willingness to pay (WTP) for the restoration and continued provision of ecosystem services from Nandi South Forest, Kenya. The study used field data collected from 360 respondents in 2025. Descriptive statistics were used to assess existing compensation mechanisms and beneficiaries' willingness to support continued ecosystem service provision, while multiple linear regression was employed to examine the socioeconomic and location-related determinants of household WTP. The findings indicate limited awareness of existing compensation mechanisms, with 57.8% of respondents reporting that no mechanisms existed, 33.1% being unsure, and only 9.2% confirming their existence. Regarding willingness to pay for continued ecosystem service provision, 14.2% of respondents indicated a willingness to pay, 11.4% were unwilling, while the majority (74.4%) were uncertain. The regression results show that education level was the only statistically significant predictor of WTP (β = −0.129, p = 0.003), while gender, sources of income, income level, distance from the forest, and perceived ecosystem benefits were statistically insignificant. The findings suggest the need for improved awareness, transparent and equitable compensation mechanisms, sustainable financing, and effective monitoring systems to enhance community participation in forest conservation and ecosystem service provision.