Municipal solid waste management in rural areas and small counties: An economic analysis using contingent valuation to estimate willingness to pay for Yunnan,China

Abstract

Municipal solid waste management (SWM) is a major challenge for local governments in rural China. One key issue is the low priority assigned by the local government which is faced with limited financing capacity. We conducted an economic analysis in Eryuan, a poor county in Yunnan, China, where the willingness- to- pay (WTP) for an improved solid waste collection and disposal service was valuated and compared with project cost. Similar to most previous studies in developing countries, this study found that the mean WTP is approximately 1% of the household income. The economic internal rate of return of the project is about 5%, which signifies the estimated social benefit to be already higher than the project cost. Moreover, we believe our estimation of social benefit to be a conservative one since our study only focuses on the local people who will be directly served by the project; wider positive externality of the project, such as CO₂ emission reduction and groundwater pollution alleviation, etc., whose impact most probably surpass the frontier of Eryuan county, are not considered explicitly in our survey. The analysis also reveals that the poorest households are not only willing to pay more than the rich households in terms of percentage income but are also willing to pay no less than the rich in terms of absolute value in locations where solid waste services are unavailable. This result reveals the fact that the poorest households have stronger demands for public SWM services, whereas the rich may have the ability to employ private solutions.