Valuing the environment in developing countries: Modeling the impact of distrust in public authorities' ability to deliver public services on the citizens' willingness to pay for improved environmental quality
In this paper, we employ the choice experiment method to estimate local citizens' valuation of a public intervention that proposes to improve the quality of an important environmental resource, namely, the Ganges River in India. To elicit citizens' willingness to pay (WTP) higher municipality taxes for an intervention that proposes to improve the quantity and quality of wastewater treated by the local sewage treatment plant (STP), 150 randomly selected citizens of the municipality of Chandernagore, located on the banks of the Ganges River in West Bengal, were interviewed. The findings reveal that almost all (98 percent) of the citizens value the quality of the water and the environment in the Ganges, though a great majority (90 percent) protested the intervention by not choosing the improved STP scenario in at least one of the eight hypothetical markets in which they were asked to participate. When asked their reasons for not preferring the improved scenarios, 92 percent of them stated that they do not trust the authorities to efficiently and effectively manage the funds generated through additional taxes. The protest responses were controlled for with the use of the nested logit model (NLM). The results reveal that the citizens are willing to pay significant amounts to ensure that the intervention takes place and that an improved STP treats larger amounts of wastewater to a higher quality before discharging it to the Ganges. Therefore, to improve the wastewater management services and the related environmental quality in the water bodies into which treated wastewater is deposited, the municipalities could rely—at least to some extent—on their citizens' WTP higher taxes for provision of improved services. To capture this WTP, however, municipalities' performance, trustworthiness, and accountability, as well as the citizens' perceptions of these, should be improved.
|Date of creation:||2010|
|Date of revision:|
|Contact details of provider:|| Postal: 2033 K Street, NW, Washington, DC 20006|
Web page: http://www.ifpri.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D., 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304, june. pag.
- D. McFadden & J. Hausman, 1981.
"Specification Tests for the Multinominal Logit Model,"
292, Massachusetts Institute of Technology (MIT), Department of Economics.
- Hausman, Jerry & McFadden, Daniel, 1984. "Specification Tests for the Multinomial Logit Model," Econometrica, Econometric Society, vol. 52(5), pages 1219-40, September.
- Wuyang Hu, 2004. "Trading off health, environmental and genetic modification attributes in food," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 31(3), pages 389-408, September.
- Sukanya Das & Rabindra N. Bhattacharya & Ekin Birol, 2009. "Estimating the value of improved wastewater treatment: The case of River Ganga, India," Environmental Economy and Policy Research Working Papers 43.2009, University of Cambridge, Department of Land Economics, revised 2009.
- Timothy Haab, 1999. "Nonparticipation or Misspecification? The Impacts of Nonparticipation on Dichotomous Choice Contingent Valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 14(4), pages 443-461, December.
- Hanley, Nick & Adamowicz, Wiktor & Wright, Robert E., 2005. "Price vector effects in choice experiments: an empirical test," Resource and Energy Economics, Elsevier, vol. 27(3), pages 227-234, October.
- Chuan-zhong Li & Jari Kuuluvainen & Eija Pouta & Mika Rekola & Olli Tahvonen, 2004. "Using Choice Experiments to Value the Natura 2000 Nature Conservation Programs in Finland," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 29(3), pages 361-374, November.
- Kosz, Michael, 1996. "Valuing riverside wetlands: the case of the "Donau-Auen" national park," Ecological Economics, Elsevier, vol. 16(2), pages 109-127, February.
- Markandya, A. & Murty, M.N., 2004. "Cost benefit analysis of cleaning the Ganges: some emerging environment and development issues," Environment and Development Economics, Cambridge University Press, vol. 9(01), pages 61-81, February.
- P. B. Anand, 2010.
"Consumer Preferences for Water Supply? An Application of Choice Models to Urban India,"
- Anand, P.B., 2001. "Consumer Preferences for Water Supply? An Application of Choice Models to Urban India," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132.
- W. Michael Hanemann, 1984. "Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 332-341.
When requesting a correction, please mention this item's handle: RePEc:fpr:ifprid:1043. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.