Measuring individuals’ valuation distributions using a stochastic payment card approach: application to solid waste management in Nigeria
Source: Environment, Development and Sustainability, Volume 11, Number 3, June 2009 , pp. 509-521(13)
Abstract:The objectives of this study are twofold. First it aims to establish empirical grounds for pricing the services of a new environmental management initiative in Enugu state, Nigeria. A joint initiative of the UK Department for International Development (DfID), Enugu State Environmental Protection Agency (ENSEPA) and the State and Local Government Programme (SLGP). The second is to test the empirical performance of a new approach to the contingent valuation method (CVM) i.e., the Stochastic Payment Card (SPC) design proposed by Wang (Contingent valuation of environmental resources: A stochastic perspective, 1997a, Journal of Environmental Economics & Management, 32:219–232, 1997b). The SPC design unlike many of the conventional CVM elicitation formats, takes into account the stochastic nature of individuals’ valuation decisions. The data for the analysis were obtained from a random sample survey of a district in Enugu metropolis. The results show that, on average, households in this city are willing to pay (WTP) 215 Naira ($1.6) monthly as against 200 Naira ($1.5) currently charged for the service by ENSEPA. Analysis of individual’s valuation distribution function indicates that this amount is positively and significantly related to the gender of the respondent, household income and the respondent’s perception of environmental quality.
Document Type: Research Article
Affiliations: 1: Health/Environmental Economics Units, Department of Economics, University of Nigeria Nsukka, Nsukka, Enugu State, Nigeria 2: Health/Environmental Economics Units, Department of Economics, University of Nigeria Nsukka, Nsukka, Enugu State, Nigeria, Email: firstname.lastname@example.org 3: Department of Economics, University of Leicester, Leicester, UK, Email: email@example.com
Publication date: June 1, 2009