Wetland Service Demand and Household Welfare: Evidence from the River Nyando Wetland Ecosystem, Kenya

Abstract:

Despite their foundational importance to rural economies and sustainability, wetland ecosystems are increasingly compromised by institutional failures and land-use shifts. This study evaluated the empirical relationship between Wetland Service Demand and household economic welfare in Kenya's River Nyando ecosystem, filling a vital knowledge gap on resource dependence under weak regulatory environments. Framed around Indirect Utility Function (IUF) Theory, the study adopted an explanatory design and captured primary data from 377 riparian household heads using mixed methods, including questionnaires, interviews, and Focus Group Discussions (FGDs). The sampling techniques used included multistage sampling, purposive sampling, stratified sampling, and systematic random sampling. The semi-log (log-linear) framework model was used to evaluate the demand-side determinants of wetland ecosystem service utilization and their subsequent impact on household welfare. Semi-logarithmic regression analysis results show that household credit access significantly boosts economic well-being (β = 0.143, p < 0.01), expanding household welfare by 15.4% by mitigating liquidity constraints. Social capital and local governance frameworks also play vital roles; institutional trust (β = 0.121, p < 0.01) and social trust (β = 0.118, p < 0.01) enhance welfare metrics by 12.9% and 12.5%, respectively, by fostering sustainable co-management rules and informal community safety nets. Furthermore, market access heavily influences economic outcomes (β = 0.164, p < 0.01), generating a 17.8% increase in welfare due to minimized transactional costs and reduced resource use. Conversely, access to extension services shows an inverse relationship (β = -0.087, p < 0.05), resulting in an 8.3% decline in household welfare indicators. The study concludes that the River Nyando Wetland serves as a crucial economic safety net for resource-poor households. The strong negative coefficients attached to education, off-farm work, and private land sizes confirm that intensive wetland extraction is fundamentally driven by poverty and structural resource deprivation. The study recommends that a profound institutional transformation is required within the regional environmental governance apparatus to replace counterproductive administrative structures.