EMERGING SOLID WASTE MARKET IN LILONGWE URBAN, MALAWI: APPLICATION OF DICHOTOMOUS CHOICE CONTINGENT VALUATION METHOD

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1 Journal of Sustanabl Dvlopmnt n Afrca (Volum 5, No.4, 203) ISSN: Claron Unvrsty of Pnnsylvana, Claron, Pnnsylvana EMERGING SOLID WASTE MARKET IN LILONGWE URBAN, MALAWI: APPLICATION OF DICHOTOMOUS CHOICE CONTINGENT VALUATION METHOD Maganga Assa Dpartmnt of Agrcultural and Appld Economcs, Bunda Collg, Unvrsty of Malaw, Llongw, Malaw ABSTRACT From ovr th rcnt past, Llongw cty n Malaw has bn on of th aras whr mor wast s gnratd. Ths sold wast gnraton has xcdd currnt nfrastructural capacty of Cty Councl and th rsultng ffct has bn th stady dgnraton n th qualty of sold wast managmnt. Consquntly, sold wast managmnt problm has thratnd publc halth and nvronmntal qualty. Such nvronmnt changs mght rod an nablng nvronmnt for potntal nvstors, whch could b a catalyst for conomc dvlopmnt, n th nar futur. Consquntly, halth and conomc dvlopmnt ntatvs at othr lvls can b arrstd and may rman unsustanabl. Thrfor, ths papr provds an mprcal analyss of th wllngnss to pay for th collcton of houshold wast for mprovd sold wast managmnt n Llongw urban. A mult-stag samplng tchnqu was mployd to slct on hundrd and ffty svn housholds from th study ara. Usng a comprhnsv cross sctonal data st on sampld housholds n a Llongw urban, th study usd dchotomous choc Contngnt Valuaton Mthod to stmat factors that affct wllngnss to pay for houshold wast dsposal. Total wllngnss-to-pay valu was stmatd to b MK4 mllon pr month. Ths could b th soluton to th problm of nadquat budgt for mprovd and sustanablty n sold wast managmnt. Lvl of ducaton, concrn for nvronmntal qualty, ncom lvl and satsfacton for wast collcton wr shown to b mportant prdctors of wllngnss-to-pay. Kywords: Contngnt valuaton mthod, Llongw urban, sold wast managmnt, wast dsposal, wllngnss to pay 56

2 INTRODUCTION Thr s a growng global nvronmntal concrn on th managmnt of wasts n urban aras of cts from dvlopng countrs (Foo, 997). Wth ncrasng populaton, thr s a spontanous ncras n th gnraton of wasts. In th last two dcads, urban populaton n Malaw has doubld and n som aras trpld (NSO, 2008). Ths can b attrbutd to urbanzaton and ndustralzaton. Incrasd populaton has posd prssur on rsourcs and, n turn, has ncrasd quantts of th gnratd urban sold wast byond th rat at whch nvronmnt can dcompos thm. Urban sold wast s rgardd as wast manatng from human sttlmnts, small ndustrs and urban actvts. Sourcs of urban sold wast nclud swag sludg plants, publc aras lk strts bns, strt swpngs, lvstock manur and housholds (World Bank, 999). Wast markt has a plac n urban and pr-urban agrcultur. Organc wast markt ncluds sal of urban wast and sal of manur from lvstock. For xampl, sold wast mght hlp to provd fd for lvstock and lvstock wast would provd manur for crops (Nunan, 2000). Such mrgng markts would provd addton ncom to th muncpal authorts and lvstock farmrs. From ovr th rcnt past, Llongw cty has bn on of th aras whr mor wast s gnratd. Th sold wast has th potntal to b turnd nto manur that can b sold to both th urban and rural communts. Mllons of fnancal rsourcs ar spnt on wast managmnt. Th wast s collctd by th Llongw Cty Assmbly (LCA) undr th clansng scton and thy ar dumpd at Ara 38 dumpst. Turnng of th muncpal sold wast nto salabl manur can, thrfor, hlp rcovr th costs of wast managmnt and rduc advrs nvronmntal mpacts comng from unusd wast (Mkwambs, 2006; Adym t al. 2007). Howvr, th changng conomc trnds and rapd urbanzaton complcat sold wast managmnt (SWM) n dvlopng countrs. Consquntly, sold wast s not only ncrasng n quantty but also changng n composton from lss organc to mor papr, packng wast, plastcs, glass, mtal wasts among othr wast, a fact ladng to th low collcton rats (Barton t. al., 993). Thus, makng th wast unft for manur. In ordr to cop up wth ths challngs and bcaus of th crtcal rol n protctng th nvronmnt and publc halth, accomplshng ffctv muncpal sold wast managmnt b a prorty for mrgng cts. Ths sold wast gnraton n Llongw cty has xcdd currnt nfrastructural capacty of Cty Councl and th rsultng ffct has bn th stady dgnraton n th qualty of sold wast managmnt. Ths nfrastructural dfcncy has dvrs mplcatons on th halth outcoms of th urban rsdnts. Gwatkn t al. (999) nots that poor santary condton account for 7% of global daths wth womn and chldrn bng at mor rsk. Consquntly, sold wast managmnt problm has thratnd publc halth and nvronmntal qualty. Furthr, thr s a thrat that such nvronmnt would rod an nablng nvronmnt for nvstors, whch ar a catalyst for conomc dvlopmnt n an mrgng cty. As a rsult halth and conomc. toursm, dvlopmnt ntatvs at othr lvls would b undrmnd and unsustanabl. Thrfor, ths study ams to assss dmand for mprovd sold wast managmnt by urban rsdnts of Llongw cty whch s crucal for plannng and polcy orntaton. Mor spcfcally, t ams to fnd th wllngnss to pay by housholds to attan a spcfd 57

3 standard of sold wast managmnt and fnd th dtrmnants of wllngnss to pay for a spcfd standard of sold wast managmnt. METHOD Study ara and data Th study was conductd wthn th cty of Llongw (Llongw urban). Th ara was chosn bcaus of th ovrwhlmng avalablty of sold wast gnratd by housholds. A fld survy was don to provd a bttr undrstandng of th natur and problms of muncpal sold wast n March 20. Th study ara was stratfd nto hgh dnsty, mdum dnsty and low dnsty n ordr to captur a rprsntatv sampl. In th scond stag, a sm-structurd qustonnar was usd to collct data from 57 housholds. A houshold was th unt of analyss (Czaja and Blar, 996; Sarantakos, 998). Data was collctd on soco-conomc charactrstcs, wllngnss to pay for sold wast gnratd, prcptons, wast collcton, dsposal and knowldg of th rspondnts on sold wast managmnt. Ky nformant ntrvws wr also conductd wth offcals from Llongw cty assmbly ncludng nformaton on currnt sold wast managmnt. Emprcal Modl Utlty s unobsrvabl, thus, dffcult to quantfy. Unlk ordnary utlty, ndrct utlty s obsrvabl. Followng Afroz t al. (2009), dchotomous choc Contngnt Valuaton Mthod (CVM) s basd on random utlty thory. It assums utlty to b transtv for th comptng altrnatvs and that th opton that ylds hghst utlty s prfrrd most (Adamowcz t al., 994). Th utlty functon of ach opton s gvn as () u = ψ +μ Whr u s th ovrall utlty, ψ s th ndrct utlty functon. Indrct utlty functon s spcfd as a comprsng th charactrstcs of an nvronmntal good or srvc, or a polcy that can b masurd and soco-conomc charactrstcs of houshold had (Afroz t al., 2009) and μ s a stochastc lmnt of th modl. Th probablty of ndvdual n choosng opton rathr than opton j s gvn by (2) P n () = P r (U n U jn ; j C, j) = P r (ψ n + μ n ψ jn + μ jn ; j C, j) Th ndvdual was askd whthr thy would b wllng to pay for a gvng ntal bd, B. If th ndvdual accpts th bd, h or sh was askd f h or sh could pay for hgh bd, B u, for sold wast managmnt. If th answr s no, thn h or sh was askd f h or sh could b wllng to pay for a bd, B L, for sold wast managmnt. Followng Mcfaddn (974), w assum that th rror trms ar dstrbutd as typ I xtrm valus. Hnc, th probablty of choosng opton s gvn by (3) P n () = j xp C n xp n jn From quaton 3, w hav four rspons probablts that can b obtand: (4) P(Ys Ys) = P(YY) = - ( Bu Zn) = yy 58

4 (5) P(Ys No) = P(YN) = (6) P(Ys No) = P(YN) = (7) P(No No) = P(NN) = - ( Bu Zn) ( B Zn) ( BLZn) = nn ( B Zn) ( BLZn) = ny = yn Th log-lklhood functon for th doubl-boundd modl, paramtrzd by B Z n s D (8) ln L ( ) n d { d yn yy ln ln yn yy ( B, B u nn nn d ( B, B ; ) d ln ( B, B ; ) u ; ) d ny ny ln ( B, B d ; )} Whr, B s ntal bd, answr to th ntal bd was no. u B s uppr bd f th answr to th ntal bd was ys, d B s th lowr bd aftr th ntal f th Whr, α n s a scal paramtr, whch s usually assumd to b qual to (Hanly t al., 998b). Louvr t al., (2000), assums th utlty functon to b lnar and addtvly sparabl th ndrct utlty functon of altrnatv. From quaton 3, ndrct utlty functon (wllngnss to pay), ψ, s thn rprsntd as: (9) X Z Y C ) n n n ( n Whr α n s a constant whch capturs th ntrnsc prfrnc of rspondnt n for opton ; β, θ, δ ar coffcnts; X rprsnts th charactrstcs of th altrnatv ; C s th bd offrd; Y s th total ncom and Z s th othr soco-conomc charactrstcs of rspondnt n. All th stmats n ths study wr arrvd at usng STATA 0.0 analytcal packag. Th dmand functon for houshold wast dsposal was drvd by rgrssng amount of wast dsposd by a houshold aganst man wllngnss to pay pr bag of wast. Othman (2002) usd doubl-log modl as: (9) Q = α (AWTP) β Applyng natural logarthm across quaton 9, w gt (0) LnQ = α + β Ln(AWTP) Whr, LnQ s natural log of th numbr of bags of wast and Ln(AWTP) s natural log of th man wllngnss to pay for bag of wasts. From quaton, numbr of wast quantty an avrag houshold wll b wllng to dspos wr forcastd. 59

5 Th bhavour of th margnal wllngnss to pay for th addton cost of wast dsposal was chckd by satsfacton of th scond ordr condton: 2 AWTP 2 Q (2) 0 RESULTS AND DISCUSSION Th dscrptv statstcs of th sampl data ar rportd n Tabl. It s found that 85% of th sampl was mals and fmals comprsd 5%. At last vry on ncludd n th sampl had attndd ducaton to som lvl. Sx prcnt (6%) attndd prmary school, 68% attndd scondary school ducaton and 26% wnt as far as trtary ducaton. An avrag houshold had had 38 yars wth a houshold sz of 5 and ncom lvl of MK7000 pr month. Tabl : Soco-conomc charactrstcs of th rspondnts Varabl Numbr of Rspondnts Prcntag Educaton Nvr attndd school 0 0 Prmary school 0 6 Scondary school Trtary school Sx Mal Fmal 22 5 Occupaton Farmng 23 5 Formal busnss Informal busnss 4 9 Formal mploymnt Informal mploymnt 29 9 Man Std dv. Mnmum Maxmum Ag (yars) Houshold sz (prsons) Incom (MK/Month) USD=MK50 Largr proporton of housholds (35%) dpnds on nformal busnss whch ncluds th sllng of charcoal, frwood, doughnuts and othr small assts. Ths s not vry stabl bcaus whn th captal s usd up popl wll hav no sourc of ncom and thrfor, t s not vry rlabl. In addton, thr ar thos who ar formally mployd. Houshold hads (5%) that had larg pcs of land rly on farmng. Th hghst numbr of farmrs s found n pr-urban bcaus most of th 60

6 houshold hads wr born thr and thy hav land whch was passd on to thm from thr parnts. Only 22% ar nto formal busnss, ths popl mostly own grocry shops. Dpndng on th sourcs of ncom t was found that thos popl whos ncom s hghr produc mor wasts snc thy hav th capablty to buy dffrnt typs of products (Nlanth t al., 2007). Th ndpndnt varabls ncludd n th doubl boundd logt modl for wllngnss to pay ncludd ag, ducaton, ncom, gndr, concrn about wast managmnt and satsfacton on wast managmnt. Th coffcnt for ag was sgnfcant at % and postv. Th valus (svn housholds) for whch wllng to pay wr zro or not wllng wr droppd followng Afroz t al. (2009). Modl rsults rportd a Mc-Fadn R 2 of 0.7 mplyng accptabl goodnss of ft. Th valu of LR was statstcally sgnfcant at % showng that all th varabls dtrmn th wllng to pay n th modl. Tabl 2: Factors affctng th Wllngnss To Pay of th housholds Varabl Coffcnt T-valu Intrcpt 50.23(6.477) 3.04*** Ag 0.23 (0.032) 7.2*** Incom 0.02 (0.005) 4.32*** Gndr (0.205).2 Concrn about wast managmnt 0.94 (0.49).86* Educaton (0.03) 6.23*** Satsfacton on wast corrcton (.9) 2.22* LR statstcs 8.34*** Mc-Fadn R *** and * mans sgnfcant at % and 0%, rspctvly Sourc: Survy data, 20 Th coffcnts for ag and ncom wr postv and sgnfcant at % mplyng a postv rlatonshp btwn ag, ncom and wllngnss to pay. Th rsult corrsponds wth th fndngs of Afroz t al. (2009). Ths would b attrbutd to th fact that oldr popl hav mor xprnc and mak matur dcsons pattrnng wast managmnt. It can also b sad that popl wth hghr ag hav hghr work xprnc and, hnc, hgh salars. Wth hgh ncoms, houshold ar mor wllng to pay bcaus t s only a small proporton of thr total walth whch bcoms asr to sacrfc. Th modl suggsts that for vry addtonal MK00 a houshold arns pr annum hs/hr WTP wll ncras by MK2. Th coffcnt for ducaton was postv and sgnfcant at %. Wth hgh ducaton, ndvduals ar mor awar of th nvronmntal ssus manatng from poor wast managmnt. Thus, wth mor awarnss, ndvduals ar mor wllng to pay for mprovd sold wast managmnt. Othr studs lk Jn t al., (2006), Danso t al., (2006) and Caplan t al., (2002) found smlar fndng. 6

7 Concrn about wast managmnt was postv and sgnfcant and 0%. Thus, lss concrnd about wast managmnt on s, not oftn wll thy b wllng to pay for mprovd wast managmnt. Ths rsult s valdatd by smlar rsult of th study conductd by Jn t al. (2006). Satsfacton on wast corrcton was postv and sgnfcant at 0% showng that wllngnss to pay gos togthr wth satsfacton of wastr corrcton, n ln wth Afros, t al. (2009) and Kassm and Al, (2006). Usng th sampl data, th man wllngnss to pay of MK92 (USD 0.54) pr month was stmatd. From ths, wllngnss to pay was aggrgatd for th total populaton. Th cty had an urban populaton of 53,77 housholds (NSO, 2008). In aggrgat trms th cty has th wllngnss to pay of MK4 mllon (USD 0.08 mllon). In whch cas, housholds ar wllng to trad off 0.54% of thr ncom. From th survy data, th avrag wast producton by a houshold s 46kg pr month. From basc thory of dmand analyss, prc ncras s xpctd to throttl dmand. Smlarly, as th wllngnss to pay ncrass, quantty of wasts dsposd s xpctd to dwndl. To tst ths thory, a log-log rgrsson modl for dmand for wast dsposal was run on man wllngnss to pay. Th rsults ar prsntd n Tabl 3. Tabl 3: WTP and Dmand for Wast Dsposal Varabl Coffcnt Std. Err. t Ln(WTP) *** Intrcpt *** F-Valu 74*** *** mans sgnfcant at %. Dpndnt varabl s log of quantty of wast dsposd Sourc: Survy data, 20 Th rsult was consstnt wth conomc thory showng a sgnfcant ngatv rlatonshp btwn th wllngnss to pay and quantty of wast dsposd. Th rgrsson modl mpls that an ncras n th cost of wast collcton by MK00 wll rduc th quantty of wast dsposal by 40%. Usng th log-log modl, th dmand schdul for wast dsposal s drvd n Fgur. Th man avrag wllngnss to pay s MK2 [MK92/(46kg/month)]. 62

8 Fgur : Dmand Curv for Wast Dsposal Gvn Dffrnt Chargs Amount of wast (kg) Sourc: Author s computaton. Th stmatd dmand functon for wast dsposal s wll bhavd, twc dffrntabl, wth scond drvatv lss than zro 2 Q WTP ( 0 ). Th nvrsd dmand functon s found by xprssng WTP as a functon of quantty of wast dsposal 2 WTP Q.629 dmandd. Thus, th scond drvat s lss than zro ( 0.03Q 0 ). Ths mpls that as far as th cost of wast dsposal ncrass at th margn housholds wll b rducng th quantty of wasts thy gnrat. Th rsult shows that lump-sum f for wast collcton may dstort ffcnt prcs as housholds may not hav ncntvs to rduc wast dsposal. If wast dsposal s chargd on a pr unt bass, housholds wll b rwardd fnancally and hav th ncntv to rduc wast gnraton. Lndrhof t al., (200) and Djkgraaf t al. (2003) rportd smlar rsult. CONCLUSION Th soluton to th problm of nadquat budgt for mprovd sold wast managmnt s suggstd. Ths study has xplord th possblty of cost sharng by housholds n sold wast managmnt whch could provd sustanabl avnu for fnancng sold wast managmnt n Llongw urban. Th study mployd contngnt valuaton mthod to dtrmn ffcnt prcs for th managmnt of muncpal sold wast. Th study fnds that thr ar factors that sgnfcantly affct wllng to pay for houshold sold wast dsposal ncludng houshold ncom lvl, concrn about wast managmnt, ducaton and satsfacton on wast corrcton. 63

9 In addton, th bhavor of dmand for wast dsposal has shown that fxd chargs for wast dsposal ar slf dfatng for a sound wast managmnt polcy. Fxd chargs would call off th housholds ncntv to rcycl wasts as mor wast gnraton would rduc thr avrag wast dsposal costs. Thus, th fndng mpls pr unt charg polcy opton to ncourag wast rducton and rcyclng. Th fndng has also shown that th housholds n th cty ar wllng only to shar 0.54% of thr ncom for mprovd wast managmnt. Ths s drawn from a wllng to pay of MK92 pr month n th cty. REFERENCES Afroz, R. and Ksuk, H. (2009). Wllngnss to pay for mprovd wast managmnt n Dhaka cty, Bangladsh. Journal of Envronmntal Managmnt 90, Adamowcz, W. Louvr, J. and Wllams, M. (994). Combnng Rvald and Statd Prfrnc Mthods for Valung Envronmntal Amnts. Journal of Envronmntal Economcs and Managmnt 26, Adym, O.O. loyd, O.B. and Oladj, A.T. (2007). Physcochmcal and Mcrobal Charactrstcs of Lachatcontamnatd Groundwatr. Asan J. Bochm, 2: Barton, C.L. and Brnstn, J.D. (993). Improvng Muncpal Sold Wast Managmnt n Thrd World Countrs. Rsourcs, Consrvaton and Rcyclng. 8: Caplan, A.J., Grjalva, T.C. and Jakus, P.M. (2002). Wast not or want not? A contngnt rankng analyss of curbsd wast dsposal optons. Ecologcal Economcs 43, Czaja, R. and Blar, J. (996). Dsgnng Survy: A Gud to Dcsons and Procdurs. Pn Forg Prss, Thousand Oaks, CA. Danso, G., Drchsl, P. Falor, S. and Gordan, M. (2006). Estmatng th dmand for muncpal wast compost va farmrs wllngnss to pay n Ghana. Wast Managmnt 26, Djkgraaf, E. and Gradus, R.H.J.M. (2003). Cost savngs of contractng rfus collcton. Emprca 30, Foo, T.S. (997). Rcyclng of domstc wast: arly xprnc n Sngapor. Habtat Intrnatonal 2, Grn, W.H. (2002). LIMDEP Vrson 8.0, Economtrc Modlng Gud. Economtrc Softwar Inc., NY. Gwartkn, D.R. and Gullot, M. (999). Th Burdn of Dsass Among th Global Poor: Currnt Stuaton, Futur Trnds and Implcatons for stratgy. Global Forum on Halth Rsarch Workng Papr. July. Hanmann, W.M. and Kannnn, B., (998). Th Statstcal Analyss of Dscrt Rspons CV Data. Workng Papr 798. Dpartmnt of Agrcultural and Rsourc Economcs, Unvrsty of Calforna, Brkly, CA. Hanly, N. Wrght, R. and Adamowcz, V. (998b). Usng Choc Exprmnts to Valu th Envronmnt. Envr. and Rs. Econ. (3-4), Jn, J., Wang, Z. and Ran, S., (2006). Estmatng th publc prfrncs for sold wast managmnt programs usng choc xprmnts n Macao. Wast Managmnt Rsarch 24, Kassm, S.M. and Al, M. (2006). Sold wast collcton by th prvat sctor: housholds prspctv fndngs from a study n Dar r Salaam Cty, Tanzana. Habtat Intrnatonal 30, Lndrhof, V., Koorman, P., Allrs, M. and Wrsma, D. (200). Wght basd prcng n th collcton of houshold wast: th Oostzaan Cas. Rsourc and Enrgy Economcs 23, Louvr, J., Hnshr, D.A. and Swat, J. (2000). Statd Choc Mthods: Analyss and Applcatons. Cambrdg Unvrsty Prss, Cambrdg. McFaddn, D., (974). Condtonal Logt Analyss of Qualtatv Choc Bhavor. In: Zarmbka, P. (Ed.), Frontrs n Economtrcs. Acadmc Prss, Nw York. Mkwambs, D.D. (2006). Communty nvolvmnt n Muncpal Sold Wast Managmnt. Bunda Collg of Agrcultur, Unvrsty of Malaw: Llongw, Malaw. 64

10 Nlanth, J.G.J.B., Patrck, J.A., Httaratch, S.C. and Plapya, S., (2007). Rlaton of wast gnraton and composton to soco-conomc factors: a cas study. Journal of Envronmntal Montorng Assssmnt 35, Nunan, F., (2000). Urban organc wast markts: rspondng to chang n Hubl-Dharwad, Inda. Habtat Intrnatonal 24 (2000) Natonal Statstcal Offc (NSO). (2008) Populaton and Housng Cnsus. Prlmnary Rport. Malaw. Othman, J. (2002). Estmatng Publc Prfrncs for Wast Managmnt n Malaysa. EEPSA. Sarantakos, S. (998). Socal Rsarch. Scond. MacMllan Publshrs, Australa, South Yarra. Waddngton, S.R. (2004). Progrss n Lftng Sol Frtlty n Southrn Afrca. Procdngs of th 4 th Intrnatonal crop scnc congrss, 26 Sptmbr- Octobr, Brsban, Australa. World Bank, (999). What a Wast: Sold Wast Managmnt n Asa. Urban Dvlopmnt Sctor Unt East Asa and Pacfc Rgon. ABOUT THE AUTHORS Maganga Assa s a socal scnc rsarch consultant and also a graduat studnt n th Dpartmnt of Agrcultural and Appld Economcs at Bunda Collg, Unvrsty of Malaw. H s pursung hs scond dgr programm n Agrcultural Economcs wth a spcalzaton n Envronmntal and Natural Rsourc Economcs. 65