Question

1. Critical literature review for 15 articles related to your research topic.

2. Determine the theory or theories that your research is based on.

3. Draft your conceptual model.

Answer 1

*Answer

Household’s Willingness to Pay for Improved Solid Waste Management

1.Basanta Barmon 2015 study and analyse the relationship between socio-economic factors and willingness to pay (WTP) for solid waste management in Dhaka city whereas the study in Kumasi Metropolis by Boateng et.al examines the factors that influence the willingness to pay for solid waste disposal. Both use primary data of sample size 120 and 394 respectively. The study in Dhaka focusses only on WTP and income whereas the study in Kumasi studied a number of variables -the effectiveness of bye-laws, the quality of services, income and education. The results in both showed that there is a positive relationship between household income and WTP for waste management. The study in Kumasi in addition found that area of residence, effective bye-laws, level of education was statistically significant. However, household size and respondents' awareness of health hazards of indiscriminate waste disposal did not have any effect on respondents' willingness to pay. The residents of both the study expressed their dissatisfaction with the quality of the existing solid waste management system and recommended that local government authorities should effectively implement the bye-laws. (Simon Boateng, 2016) The study concluded that residents indeed are willing to pay more for better waste management to enhance the existing solid waste management system - resulting in cleaner and more hygienic environment. (Basanta Barmon, 2015)

Nkansah E, (2015) in their paper in Tema Metropolis concludes that 85% of the respondents are willing to pay for improved solid waste service and this is positively influenced by educational level, number of dependents, income, size of household and distance to solid waste dumping sites. In contrast Aggrey and Douglason (2010) paper in Kampala City observes that education level, marital status, quantity of waste generated, household size and household expenditure don’t influence the WTP only age was significantly related. Ashish Taru Roy ,2013 also focussed on the WTP for an improved waste management in Silchar according to which 63% of the households are willing to pay for improved waste management. An open-ended contingent valuation method and multiple regression model was applied to establish the determinants of willingness to pay. The multiple regression estimates revealed that those with a higher expenditure (proxy of income) are willing to pay for an improved waste management. Awareness, size of the family, education and female worker had a positive relationship with WTP.

Subhadarsini, 2015 tries to find out how much value people put on a clean environment in terms of their willingness to pay using a contingent valuation method in Orissa. The study suggests that income and education are the significant factors that is WTP has a positive relationship with both income and education. It was observed in her analysis that people are willing to pay and their depends on their ability to pay. (Subhadarsini, 2015)Whereas Bijan Makey 2017, evaluates willingness to pay from 401 households in Nepal. The households were selected using a stratified sampling method. They’ve used contingent valuation method to calculate households’ WTP, logit regression model to determine factors influencing WTP and tobit regression model to determine factors influencing the maximum amount households are willing to pay for improved waste collection service. As per the findings 61%of the households are willing to pay an average amount of Rs. 73 pm. Except for education of household head, all factors like income, education significantly influence the willing to pay. (Bijan Maskey, 2017) In contrast Muniyandi Balasubramanian logit results stated that sex was the most important factor for improved solid waste management services in the study area of Madurai .

Tumpa Hazra,2013 and Qingbin Songa,2016 emphasise on users’ perceptions and attitudes towards different attributes of SWM service in terms of WTP in Kolkata and Macau respectively. The results showed that Macau residents had relatively good environmental awareness and most respondents (92.4%) expressed their satisfactions on current situation. The survey data revealed a positive attitude towards source separating and most of respondents (95.7%) were willing to sort the solid waste at home, if the government required them to do it. This paper used the used the logistic regression method to support the hypothesis that the probability of the respondents’ saying ‘yes’ to the WTP question increases with education level. (Qingbin Songa, 2016) Hazra has employed SP DCE method to estimate the WTP values of various relevant attributes of SWM system of and an MNL model is used to value the attributes related to SWM system. The attributes considered are frequency of collection of waste, walking time for disposal of waste by household, types of storage bin and transfer vehicle and segregation of waste at home before disposal. Based on the utility equation, values of different attributes considered in the study are estimated. The conclusion of both the papers were that the WTPs are instrumental in deciding policy changes and improving the planning of SWM services.

Anjum 2013 put forth research objectives that revolve around changes in the price for solid waste management services and WTP for solid waste management services. The paper also analysed the determinants of demand for waste management services. The methodology used was logit regression and it concluded that 65.4 percent of the respondents are willing for the improvement of the environmental situation of the region. The second regression model results showed a mean willingness to pay of Rs 289.15 per household per month and the determinants like age, services availability, and household size of the respondents showing negative relationship, while other variables like education, environmental awareness and income of the respondents showed a positive relationship (Anjum, 2013)

Residents attitude and community participation was observed as a major reason for the waste management project being successful in Bamko as they undertook participatory assessment among the citizens which can be seen as a major tool for raising awareness .Kumar M 2013 also emphasized the importance of community engagement .This is deficient in India as assessment even if conducted is done only by officials hence it is important to examine the “objectives of waste management projects based on community participation and to assess whether the proposed methods match the scope of the intended effects .” (Maria S Muller, 2002) The theme revolved around the determinants of WTP which majorly revolved around income, education, sex, household size. Few papers like Boateng 2016, Tarun Roy 2013 and Tumpa Hazra 2013 took other attributes like effectiveness of bylaws, working women and walking time for disposal of waste by household to name a few.

2. Theories

The consumer surplus is the consumer’s willingness to pay (WTP) for the improved quality. It is difficult to monetize values for environment as its not traded in the market like any other commodity hence economist have come up with different methods for environmental evaluation. The methods are broadly categorised into - the revealed preference technique and the stated preference technique. This study has focused on the CVM method so as to elicit consumers’ WTP for improved solid waste management .It was first put forth by Ciriacy-Wantrup and today it is being extensively used in developing and developed countries .The method creates a hypothetical market where individuals are asked to state their maximum willingness to pay for an additional unit of an environmental good or service .It is today popularly used in the area of waste management .

3.Objective

Factors that affect Household willingness to pay (WTP) for improved solid waste management

The Model

Households WTP is treated as the dependent where the stated monetary value is taken into analysis. Among the set of independent variables different variables including education level, incomes and sex The relationship has been examined with the help of Ordinary Least square model.

Variable definition	Description
Sex (SEX)	Gender of respondent coded as 1 female and 0 male
Educational level (EDU)	years of education has been used as a proxy
Income (INC)	Households are categorized into four income quartiles
Maximum amount willing to pay (WTP)	Maximum amount of willing to pay for improved solid waste management

The model used for determination of household WTP for improved solid waste management services is-  

WTPi = β0 + β1 EDU + β2 INC + β3 SEX+ ui

WTP= Willingness to Pay

EDU= Education of Household   

INC=Income of household  

Gender = SEX

Priori Expectations

INC: Income is positively related to WTP.

EDU: Education is positively related to WTP.

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