Household Willingness to Pay for Improved Solid Waste Management Service: The Case of Ambo Town, Ethiopia

Abstract

Solid waste management is continued to be a major challenge and environmental problem of Ambo town. Households are the main sources of solid waste as well as they are the main victims due to unmanaged solid waste. Thus, involving the households’ as a stakeholder with a service charge could be reasonable to propose mechanisms for cost recovery and to provide the service sustainably. The objectives of this study are to identify factors affecting households’ willingness to pay (WTP), amount they are willing to pay and estimate the aggregate demand for improved solid waste management service. A multistage sampling technique was employed to select 396 respondents for the study. The binery probit model was used to obtain the mean WTP and identify factor affecting households’ WTP decision. The result depicts that mean monthly WTP by the households is Birr 29.55. The probit model result also revealed that quantity of solid waste generated, monthly income, perception of household’s about solid waste management, sex household head, marital status and educational level were statistically significant in determining household’s decision to pay. Tobit model was employed to examine determinants of the amount of money the households are WTP. Based on the model result, quantity of solid waste generated, perception of household’s, family size, educational level and total income were significant variables in explaining maximum amount are WTP. The result of the study suggests that any policy directed towards the provision of effective solid waste management in the town should incorporate demand side information related to household’s WTP, amount WTP and significant factors determine their WTP.

In addition, giving more emphasis to introduce service charge for improved solid waste management is the appropriate strategy in order to solve financial constraint and for implementation of integrated improved solid waste management which involves the household as stakeholders.