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Watershed protection is one of the many goods and services provided by the world's fast disappearing tropical forests. Among the variety of watershed protection benefits, flood damage alleviation is crucial, particularly in upland watersheds. This study is a rare attempt to estimate flooding alleviation benefits, resulting from the protection of upland forests in Eastern Madagascar. A three stage model is used to examine the relationship between the economic concept of value and the bio-physical dimensions of the protected area. This approach combines techniques from remote sensing, soil and hydrologic sciences and economics. In stage one, the relationship between changes in land use practices and the extent of flooding in immediate downstream is established by using remotely sensed and hydrologic-runoff data. Stage two relates the impact of increased flooding to crop production by comparing the hydrologic …