51 st Annual Philippine Economic Society Meeting. Intercontinental Manila

51st Annual Philippine Economic Society Meeting. Intercontinental Manila.

LEVI GUILLERMO LIMA GEGANZOUniversity of the Philippines VisayasMiag-ao, Iloilo, Philippines 5023

WHO SHOULD SHOULDER THE COST ON SOLID WASTE MANAGEMENT?

The Case of Urbanizing Municipalities

WHO SHOULD SHOULDER THE COST ON SOLID WASTE MANAGEMENT?The Case of Urbanizing Municipalities

Presentation OutlinePART I: Status of Solid Waste Management in Iloilo

PART II: Factors Affecting The Willingness-To-Pay For An Improved Solid Waste Collection in Miag-ao Town Proper Among Households in Miag-ao Town Proper


Solid Waste Management Schemes

ReduceRecycle

Refuse Reuse

Recover


Developed SWM Strategies Using 5Rs• bag fees / eco-bag• plastic ban• penalties for littering and other fines• incentive programs• solid waste collection fee


Solid Waste Management Criteria1. Waste Segregation at Source2. Material Recovery Facility3. Type of MSW Disposal (Controlled or Open)4. Safe Closure Plan5. Sanitary Landfill6. Presence of Municipal SWM Plans


Types of Municipal SWM Plans1.) Anti-Littering Ordinances / Anti-Dumping Ordinances2.) Adoption of RA 9003 (ESWMA)3.) Municipal Environmental Codes 4.) Solid Waste Management Ordinances5.) Clean and Green Programs6.) Comprehensive Solid Waste Management Plan


Status of SWM in Iloilo Province

81.4

18.6Waste Segregation at Source

YesNo


86.046511627907

13.953488372093

Presence of Material Recovery Facilities

YesNo


51.162790697674448.8372093023256

Type of Garbage Disposal

ControlledOpen


69.7674418604651

30.2325581395349

Safe Closure Plan

YesNo


37.2093023255814

62.7906976744186

Presence of Sanitary Landfill

ControlledOpen


Rationale of the Study• The Municipality of Miag-ao is dubbed to be one of the best effective

implementers of integrated solid waste management in the nation after being a hall-of-famer of the Office of the President as the Cleanest and Greenest Municipality in the Region VI - Western Visayas for three consecutive years and winning the national award for several times.



Photo Courtesy of 365greatpinoystuff.wordpress.com and digitalphotographer.com.ph


• However, despite its cleanliness, Miag-ao’s increasing economic activities and expansion leads to problems in solid waste management of the town proper. Increased amount of garbage in creeks and waterways, coastal areas and public properties can be observed.


Rationale of the Study

increasing volume of solid waste municipal solid waste management services


Brgy. Tugara-ao, Miag-ao, Iloilo

GENERATION COLLECTION TRANSPORTATION

MATERIAL RECOVERY &

PROPER WASTE

DISPOSAL

CONSUMPTION

Households Office of General Municipal Services Dump Trucks

SOLID WASTE MANAGEMENT PROCESSES


Municipal Proposed Budget for Solid Waste Management Programs (2011)

Actual Collected Revenue for Solid Waste Management Programs (2010)

Shortage in Budget for Municipal Solid Waste Management Programs

PHP 600,000.00

PHP 441,920.00

PHP 158,080.00


Rationale of the StudyThis study was dedicated for the purpose of improving the municipal

solid waste collection in the Town Proper of Miag-ao, Iloilo, Philippines. This study will focus on what factors affect the willingness-to-pay of households for an improved municipal solid waste collection service.


Significance of the Study• For legislative purposes• For early sustainable development plans of urbanizing municipalities


Objective of the Study

to identify the factors affecting the willingness-to-pay of the households in the town proper of the Municipality of Miag-ao, Iloilo

for an improved municipal solid waste collection service


Limitations of the Study• Due to time constraints and other considerations, the research only

covered the households in the Town Proper of Miag-ao, Iloilo, Philippines as the area of the study.

• A total number of 240 households from the eight (8) barangays in the Miag-ao Town Proper were used as study participants.


Theoretical Framework• Municipal solid waste collection service is one of the services

provided by the local government, which aims to eradicate garbage littered all around the community.

• Solid waste collection helps in the conservation and protection of the environment since the service is designed to collect solid wastes that are one of the major reasons contributing to the destruction of the environment.


Theoretical Framework• However, benefits that people can get from an efficient and effective

solid waste management such as environmental quality cannot be reflected in normal market prices because it has the characteristics of a non-market priced good.

• In order to monetize the cost of the non-market priced good, non-market valuation methods are being used.


Theoretical FrameworkContingent Valuation Method

and Willingess-to-Pay


Derivation of Willingness-To-Pay

Where:

WTP = average willingness-to-pay of households v = the interval between pricesN = number of values of pricek = lowest possible value


Estimation of MWTPCoefficient Estimation

Mean maximum WTP = 1/β1 [ln (1+ e α0 + β2 Q + Σ βi Si)]Where,

β0 and β1 are absolute coefficient estimates from the logistic regression


Estimation of MWTPTurnbull WTP Estimation

M*

ELB (WTP) = Σ tj (F*j+1 - F*

j) j = 0

Where,

F*j = N*

j / T*j is the ratio of those who are not willing-to-pay on

an offered bid price, where

N*j = number of not willing-to-pay responses

T*j = number of samples offered a specific bid

tj = bid price, and

f*j = Turnbull estimate of N*

j / T*j.


Empirical ModelWTP = F(x1, x2, x3,…,x9)

Where,X1 = sexX2 = ageX3 = highest educational attainmentX4 = civil statusX5 = household sizeX6 = household’s total monthly incomeX7 = average daily volume of waste generatedX8 = level of knowledge of household in proper solid waste managementX9 = bid price


Regression Binary Logistic Model

where, Y is the response of household on their willingness-to-pay

Z is the sum of the products of the coefficients and the dependent variables (plus the error term)


Barangay Household Population Number of HouseholdsBaybay Norte 2,434 288

Baybay Sur 1,108 240Bolho 519 87Mat-y 2,190 112Sapa 575 362Tacas 1,033 183

Ubos Ilawod 955 181Ubos Ilaya 909 179

TOTAL 9,723 1,632

Population and Number of Households by Barangays in Miag-ao Town Proper


Barangay Household Population Number of HouseholdsBaybay Norte 2,434 288

Baybay Sur 1,108 240Bolho 519 87Mat-y 2,190 112Sapa 575 362Tacas 1,033 183

Ubos Ilawod 955 181Ubos Ilaya 909 179

TOTAL 9,723 1,632

Population and Number of Households by Barangays in Miag-ao Town Proper


Distribution of Participating Households by their Decision to Pay for an Improved Municipal Solid Waste Collection Service

Household Type No.(N=240) %

Willing-To-Pay 177 73.75

Not Willing-To-Pay 63 26.25


Socio-Demographic and Economic Profile of Households


1. Males2. Older people3. Married individuals4. College and High School Graduates

More Willing-To-Pay (Socio-Demographics and Education)


1. Government Employees2. Monthly Income: 3,542 vs 3,6223. Temporary / Contractual Workers

More Willing-To-Pay (Occupation)


1. Bigger Household Size2. Lower Income (14,717 vs 17,561)3. Owned House vs. Others

More Willing-To-Pay (Household/Ocuupational Information)


Household Solid Waste Disposal Practices


Households with more wastes (all types, except yard wastes) are not willing-to-pay for improved services, in terms of volume and type-count.

Households not willing-to-pay for improved services are disposing their wastes more frequently than those willing-to-pay.

More Willing-To-Pay (Solid Waste Disposal Practices)


Households more willing-to-pay for improved SWC are slightly more willing-to-pay, than those who are not willing-to-pay.

Households more willing-to-pay are more contented in the current SWC thank those who are not willing-to-pay.

More Willing-To-Pay (Solid Waste Disposal Practices)


Perception and Concern of Households on Solid Waste Collection


Major National Issues and Households’ Perception

1.Crime2.Corruption 3.Unemployment4.Poverty5.Climate Change6.Env’l Degradation7.Problems in Health System 8.SWM Problems9.Calamity and Disaster 10.Overpopulation


Major Provincial Issues and Households’ Perception

1.Corruption2.Solid Waste Management Problems3.Problems in Provincial Health System4.Unemployment in the Province5. Insufficient Safe Water 6.Agricultural Problems 7.Crime in the Province8. Insufficient Electricity Problems9.Rebel and Leftist Groups10.Insufficient Transport Services


Major Municipal Issues and Households’ Perception

1.Solid Waste Management Problems2.Problems in the Health System3.Crime in the Municipality4.Corruption in the Local Government5.Agricultural Problems6. Insufficient Electricity Problems7. Insufficient Safe Water8.Effects of Climate Change9.Unemployment in the Municipality


Major Municipal Environmental Issues and Households’ Perception

1.Solid Waste Management Problems2.Land Conversion3.Agricultural Problems 4.Water Pollution5.Flooding6.Air Pollution7.Climate Change 8.Extinction of Natural Resources9.Pests


Level of Concern on Environmental ProtectionHouseholds are very concerned in protecting the environment.

Households perceived that SWM is a major issue in the municipality.


Household Perception on Solving SWM Issues

1.Improvement of solid waste collection2.Proper segregation of wastes3.Regular home cleanup4.Regular barangay cleanup5.Improvement of MRFs6.Unclogging of Wastes in Drainages and Waterways7.Improvement of Recycling8.Teaching proper SWM9.Limiting of Plastic Usage


VARIABLEHousehold Type

All(N=240)Willing-to-Pay

(n=177)Not Willing-

to-Pay(n=63)

Knowledge Index Rating (mean) 8.06 7.86 8.00

Knowledge Index Rating (KIR)


Willingness-to-Pay of Households to Pay for An Improved Municipal Solid Waste Collection Service


Bid Price(in PhP)

WTP Replies of Households

Yes No All

35 (n=60) 43 (71.67) 17 (28.33) 60 (100)

60 (n=60) 34 (56.67) 26 (43.33) 60 (100)

90 (n=60) 28 (46.67) 32 (53.33) 60 (100)

120 (n=60) 10 (16.67) 50 (83.33) 60 (100)

All (N=240) 115 (47.92) 125 (52.08) 240 (100)

Bid Prices and WTP


•Not contented with the current SWC service•There is a room for improvement for the SWC service•Important for the health of the household•Increase cleanliness of the municipality•Improve overall proper solid waste management

Why Pay?


•Contented with the current service•Does not need to improve service•Household would not allot more of their budget for SWC•It is the local government's responsibility and not of the people•Doesn't have the responsibility over SWM problems•Practice other disposal method/s other than collection

Why Not?


Preferred Payment Vehicle


VARIABLEHouseholds Willing-to-Pay

(n=115)No. %

Duration of PaymentMonthlyEvery Collection 84

3173.0426.96

Payment ModeCollection Tickets Pay-As-You-Throw 95

2082.6117.39

Payment BasisFlat RateDependent on Quantity of ContainersDependent on Weight of Wastes

832012

72.1717.3910.43

To Whom To PayBarangayCollector Municipality

9315

7

80.8713.04

6.09

Preferred Payment Vehicle


Mean Willingness-to-Pay Estimates


VARIABLES COEFFICIENT MEAN COMPUTATIONConstant -4.33088 1 -4.33088Sex -0.796829 1.445833 -1.15208Age 0.0383104 54.35417 2.08233Highest Educational Attainment 0.207833 0.420833 0.087463Civil Status 2.27776 0.929167 2.116419Household Size 0.075715 4.783333 0.36217Household Income -5.05E-06 15463.25 -0.07816Volume of Waste -0.247424 1.439167 -0.35608Knowledge Index Rating 4.15589 0.800417 3.326444Bid Price -0.0289253 76.25 -2.20555

Logistic Regression Results


Coefficient Estimation

Mean WTP = 1/-0.0289253 [ln ( 1 + e {-4.33088 – 0.796829 (1.445833) + ..} )] = PhP 36.32


Turnbull WTPtj Nj Tj Fj* fj*

35 17 60 0.283 0.28360 26 60 0.433 0.1590 32 60 0.533 0.1120 50 60 0.833 0.3120+ - 1 1 0.167


Turnbull Mean WTP EstimationTurnbull WTP = Σ tjf*j+1

= 0 (0.283) + 35 (0.15) + 60 (0.1) + 90 (0.3) + 120 (0.167)

= 0 + 5.25 + 6 + 27 + 20.04 = PhP 58.25


Social Mean Willingness-to-PaySocial Mean WTP

= (percentage of the participants who are willing-to-pay) x (total number households of the barangays in the town proper) x (mean WTP)

= (115/240) x (1,632) x (PhP 58.25)= 0.497 x 1632 x 58.25= PhP 47, 246.808


Factors Affecting the Willingness-to-Pay Decisions of Households for An Improved Municipal Solid Waste Collection Service


VARIABLE Coefficient Std Error Z p-valueConstant -2.76268 2.1829 -1.2656 0.20566Sex (male) -0.954093 0.322013 -2.9629 0.00305***Age 0.0268956 0.0177502 1.5152 0.12971Highest Educational Attainment

0.00282769 0.136416 0.0207 0.98346

Civil Status (married) 0.966634 0.32048 3.0162 0.00256***Household Size 0.0867375 0.0861439 1.0069 0.31399

Household Income -4.73133e-07

7.86085e-06 -0.0602 0.95201

Average Daily Volume of Wastes Generated

-0.258361 0.279432 -0.9246 0.35518

Knowledge Index Rating (+) 4.59232 2.36017 1.9458 0.05168*Bid Price (+) -0.029944 0.00517863 -5.7822 7.37e-09***Number of observations = 240Number of cases 'correctly predicted' = 168 (70.00%)Likelihood ratio test: Chi-square(9) = 63.1949 [0.0000]


Implications• Less than half of the households in the town proper of Municipality of

Miag-ao, Iloilo would pay for an improved municipal solid waste collection service even though a need for service improvement is being manifested


Implications• Increase knowledge and community participation• Review of the municipal solid waste services• Reduce political barriers• Stakeholders must collaborate on solving the SWM issues• Law reinforcements

Documents

51 st Annual Philippine Economic Society Meeting. Intercontinental Manila