Plastic recycling can help improving the environment quality by reducing waste discharge as well as keeping the surrounding clean. This study examines the perception of individual solid-waste generators about plastic recycling and their willingness to pay (WTP) an extra fee in addition to monthly waste collection charges at their current resident places.
Trang 11 Introduction
Dangers from solid wastes generation to the
global environment as well as human health have
been remarked and received a great concern of
so-cieties recently Plastic is one of the central
con-cerns because most plastics are non-degradable
and leads to a growing concern about space at
san-itary landfill sites According to Vietnam
Environ-ment Situation 2004 – Solid Waste Report, solid
wastes mostly originated from households (60% –
70%) in urban areas Statistics (2009) of HCMC
Department of Natural Resource and Environment
shows that the solid waste system collects
approx-imately about 5,600 to 6,000 tonnes of wastes
daily, in which plastics account for the second
largest proportion, about 10.8% in households and
19% in schools (The Saigon Times) (1) A large
volume of plastic wastes is not collected for re-use
or recycling but goes directly to landfills and this
causes a great problem for the current ambient
en-vironment quality in the city
Recycling is widely considered as a common method to deal with such wastes Recycling plas-tics can, in many cases, help reducing negative ef-fects on the environment and keeping the surrounding clean Although several global envi-ronmental programs have been implemented to improve the country’s environmental status in cent years, solid waste management, especially re-garding plastic recycling, seems to have lower priority than the other issues such as climate change and water pollution Despite the fact that the country has its own Environmental Law and also follows the global framework of environmen-tal enhancement in some aspects, well-structured policies and regulations regarding waste recycling (i.e plastic waste) have not been enacted This shows the need of further research of consumers’
or public perception on plastic recycling to support policy makers
Recycling would result in cost for the local
gov-Plastic recycling can help improving the environment quality by reducing waste dis-charge as well as keeping the surrounding clean This study examines the perception of individual solid-waste generators about plastic recycling and their willingness to pay (WTP) an extra fee in addition to monthly waste collection charges at their current res-ident places A survey-based, contingent valuation, approach with an anchored payment card technique was used to interview 487 individuals in Hochiminh city The findings show that the mean expected WTP is VND43,200 per year from ordered probit model Mar-ital status, education level, employment and income are significant socioeconomic deter-minants of consumers’ WTP Other important behavioral factors are concerns towards the current ambient environment quality and the threats to human health caused by plas-tic wastes and the benefit of plasplas-tic wastes recycling
Keyword: willingness to pay, plastic waste recycling, contingent valuation method
Trang 2ernment and the program could succeed only with
the contribution from the public This study aims
to examine the individual’s perception on plastic
recycling program at a more practical aspect And
a hypothesized scenario is used to elicit the
finan-cial contribution of individuals or, in other words,
their WTP for plastic recycling The policy context
is consumers’ preferences for an extra payment in
addition to monthly waste collection charges at
their current living places Because HCMC is
con-sidered as the biggest commercial city and the
most populated in Vietnam, and since such
envi-ronmental issue is more serious in urban area, the
research scope is limited to HCMC residents only
2 Theoretical consideration
a Contingent Valuation Method (CVM):
CVM is a survey-based method of eliciting
WTP for an improvement in environmental
qual-ity through direct questions Owing to its
advan-tage in measuring passive value of public goods
where market price does not exist, the CV method
is considered a capable measure for evaluating
non-marketed goods The specific eliciting WTP
technique plays an important role in CV research
because each type of question format may bring
different results and associated biasness The
pay-ment card method (PC) does not suffer a starting
point bias associated with iterative bidding and
dichotomous choice This method presents
respon-dents with a range of ordered threshold values
and requires them to pick a single amount they
are willing to pay However, the PC technique can
still have some drawbacks associated with the
provision of bids, anchoring effects and the size of
intervals (Cameron and Huppert, 1989)
b Econometric model:
For PC method, the monetary value of WTP
that respondents choose is treated as an ordinal
variable and analyzed with an ordered regression
model The ordered probit model builds around a
latent regression in the same manner as the
bi-nominal probit model with attitudinal, behavioral
and demographic information as explanatory
vari-ables of WTP (Cameron and Huppert, 1989) We
assume a standard normal distribution with
lin-earity in WTP as follows:
(1) where and denotes the
unserved latent variable of willingness to pay for
ob-servation i which lies between cut-points tUi and
tLiin the distribution of Let Y be the observed ordinal variable, that is:
where both tUi and tLi are unknown parame-ters to be estimated with b (Greene, 2003)
Respondents have their own WTP intensity but cannot express these given the limited number of possible answers and will choose the answer that most closely represents their own WTP intensity
Then the probability of WTP that lies within the interval is:
(2) With the assumption that the error term is normally distributed between zero and standard deviation s, equation (2) can be re-written as (Cameron and Huppert, 1989; Haab and Mc-Connell, 2002):
(3) where the function is the cumulative standard normal density function and equation (3) is called the ordered probit model (Greene, 2003) With number of observation n, the log-likelihood func-tion for the responses can be written as:
(4)
The parameters of coefficients b are estimated using maximum likelihood estimation of the or-dered probit model Then, the interval bounds i.e
t L and t U are derived (these are the “cuts” values
in STATA)
Since both parameters b and standard devia-tion s need to be estimated, the log-likelihood function (4) will not result in a unique solution to fit the data well (Jackman, 2000) Because the in-tercept term is dropped from the maximum likeli-hood estimation, it is necessary to assume the constant, and standard deviation s
The coefficients derived from an ordered probit regression have the form b/s and constant 1/s and the variance of error term is fixed at 1 from ordered probit model in most of the standard com-puter programs (Winship and Mare, 1984) Thus,
it is required to recalculate the original b by rescaling the estimated coefficients with standard deviation s This process is called re-calibrating the b terms once we set the thresholds to cut
Trang 3points in monetary amounts Hence, it is possible
to interpret the effects of explanatory variables in
dollar metric, rather than in probit metric
(Jack-man, 2000) We obtain a rescaling constant (or
standard deviation s) from a linear
transforma-tion as:
where z is a location estimate from the probit
model, z* is the midpoints of thresholds in dollar
amount given as bid levels in the payment card
determined by (tL+ tU)/2 , m is the re-scaling
con-stant (called the standard deviation s), and c is
the location shift It is also assumed that the
lo-cation shift c is the intercept term which was
dropped from the ordered probit model (Jackman,
2000)
The re-calibrating process results in a new set
of b, denoted as brescaled Given a set of brescaled, the
expected willingness to pay (EWTP) is derived by
reconstructing the original form of WTP from
equation (1)
EWTPoprobit= Xibrescaled (6)
Then, the mean of expected willingness to pay
from the population are estimated by:
(7) The marginal effects of changes in the
regres-sors of the ordered probit model can be evaluated
at sample means or at other relevant values of the
regressors The marginal effect is calculated as:
(8)
where k denotes a single explanatory variable
and change in probabilities for the WTP
cate-gories must sum to zero (Cranfield and
Magnus-son, 2003)
3 Methodology
a Value to be measured: consumers’
will-ingness to pay for plastic recycling:
Depending on available collection scheme,
con-sumers will have different choices In general,
there are three main schemes of plastics waste
collection in Vietnam: vehicles used for collection
and residents paying for a monthly waste
collec-tion charge; the plastics waste re-purchase scheme
in which household would receive an amount for a
quantity of solid waste from a collector; and the
environmental promotion programs of some
insti-tutions going ‘green’ The basic difference in the
three schemes above is the consumer utility opti-mization problem With the first scheme where consumers are asked for their WTP, they will try
to minimize their pay-out consistently with their utility, so the bid level would be distributed be-tween zero and a relative low upper value In con-trast, the consumer may seek to maximize the amount to be paid by the collectors then the will-ingness to accept (WTA) would be relative high in the second scheme or they would even have zero WTP or WTA in the third scheme This study is focused to the first scheme only as people will be asked for their WTP The proposed payment ve-hicle would be an addition to the monthly waste collection charge
b Determinants of consumers’ willingness
to pay for recycling:
The empirical model regresses consumers’ will-ingness to pay for recycling on a number of socioe-conomic factors and behavioral explanatory variables
- Socioeconomic variables:
Socioeconomic determinants are factors that reflect demographic characteristics of a consumer such as sex, age, marital status, income, employ-ment, education level, and household size These factors are widely used in most CV studies Ex-cept household size and age which are continuous values, all the socioeconomic variables are defined
as either dummies (i.e sex, marital status, and employment) or as categories (i.e income, and ed-ucational level) Income is categorized into six seg-ments rather than as continuous numbers (Haab and McConnell, 2002) For WTP measurement, both income and education are employed in the re-gression model with their ordinal values
- Attitudinal variables:
Behavioral factors included in the model are based on consumers’ moral norm in plastic recy-cling and represent consumers’ perception regard-ing environmental problem (Hage et al 2009) In this study, we hypothesize that behavioral factors might affect WTP for recycling, which are: (i) Per-ception of the costs/threats of plastic wastes; (ii) Perception of the benefit of plastic recycling; (iii) Perception of the needs for recycling; and (iv) The habits of dealing with waste There were 10 fac-tors measured in terms of a Likert score value ranging from 1 to 5 in the questionnaire Regard-ing those answers regardRegard-ing the consumers’ habit
Trang 4in dealing with plastic wastes which have 4 values
ranging from 1-4, Likert scores 3 and 4 are
verted to “Good habit” and scores 1 and 2 are
con-verted to “Bad habit” The remaining answers
regarding the consumers’ consideration towards
the agreement of recycling benefits and towards
the need, the costs of plastic wastes were
verted to “High level of agreement” or “High
con-cern” for scores 4 and 5 and “Neutral to low level
of agreement” or “Neutral to low concern” for
scores 1, 2 and 3, respectively
c Survey administration and data
collec-tion:
A survey of residents currently living in HCMC
in the 18-60 age bracket and having ability to
ac-cess internet and respond to the online
question-naire was conducted in August 2010 via web-mail
A total of 487 responses were collected Followed
the data cleaning rule, a total of 35 protest
re-sponses were dropped, accounting for 7.19% of
total Thus, the remaining 452 observations
in-cluding 416 positive WTPs and 36 true zero bids
(2) were used in the regressions
The scenario described in the survey hypothe-sizes that there would be a scheme in which con-sumer would pay a sum in addition to the waste collection charge at his/her current living place
This extra amount aims to compensate the cost of recycling plastics e.g to set up plastics collection points and services, investment in recycling tech-nology and all other costs of the recycling process
This provision is based on a yearly service charge
The CV question to ask for consumer’s maximum WTP is “Are you willing to pay an extra fee apart from monthly waste collection charge for plastic recycling?” by applying the unanchored payment card method A set of six bids was presented in a payment screen as follows: ‘0’, ‘12,000’, ’24,000’,
‘36,000’, ‘50,000’, and ‘72,000’
d Summary of data statistics:
The descriptive statistics of the independent variables in the model are presented in Tables 1 and 2 for the socioeconomic factors and for the be-havioral factors, respectively
1 = High-school level
2 = Bachelor degree from university/college
3 = Postgraduate study/higher degree
EMPLOY Employment status: 1 = Employed, 0 = Unemployed 0.87611 0 1
0 = Under VND2 million
1 = VND2 to 5 million
2 = VND5 to 7 million
3 = VND7 to 10 million
4 = VND10 to 20 million
5 = Over VND20 million
INFO Have you heard information/ been trained in the needs of
Table 1: Definitions and summary of statistics of socioeconomic variables
Trang 54 Empirical results
It is remarkable that there are only 36
no-re-sponses which account for the smallest percentage
in total responses This means that most people are willing to pay an additional charge Mean-while, 30.53% of the respondents voted for the highest bid level (VND72,000 per year) and thus
ENVQUAL Consider the ambient environment quality in HCMC 4.25221 1 5 ENVTHREAT Consider the threats from plastic waste to the environment 4.53982 2 5 HEALTH Consider the threats from plastic waste to your physical health 4.25664 1 5
* Likert scale for ENVQUAL, ENVTHREAT, HEALTH
5 = Very serious; 4 = Somewhat serious; 3 = Neutral
2 = Somewhat not serious; 1 = Not serious
* Converted values for ENVQUAL, ENVTHREAT, HEALTH
1 = High concern (Likert scores 4 and 5); 0 = Low concern (Likert scores 1,2, and 3)
* Likert scale for NEED
5 = Very necessary; 4 = Somewhat serious; 3 = Neutral 2= Somewhat necessary; 1= Not necessary
* Converted values for NEED
1 = High concern (Likert scores 4 and 5); 0 = Low concern (Liket scores 1,2, and 3)
ACT1 Re-use the plastics if they are still usable (Bags, bottles, bins, etc.) 3.26549 1 4 ACT2 Separate the plastics for recycling (i.e separate plastics from otherwaste) 2.37611 1 4
*Likert scale for ACT1, ACT2
4 = Regularly; 3= Often; 2 = Rarely ; 1= Never
*Likert scale for ACT3
4 = Never; 3= Rarely; 2 = Often ; 1= Regular
* Converted values for ACT1, ACT2, ACT3
1 = Good habit (Likert scores 3,4); 0 = Bad habit (Likert scores 1,2) BEN1 Recycling helps reduce the amount of waste entering landfills 4.75664 1 5 BEN2 Recycling helps protect the environment from wasting input
BEN3 Recycling helps keeping the surrounding clean 4.7854 1 5
*Likert scale for BEN1, BEN2, BEN3
5 = Totally agree; 4 = Somewhat agree; 3 = Neutral;
2 = Somewhat disagree; 1 = Totally disagree
* Converted values for BEN1, BEN2, BEN3
1 = High level of agreement (Likert scores 4 and 5)
0 = Low level of agreement (Likert scores 1,2, and 3)
Table 2: Definition and summary of statistics of behavioral explanatory variables
Trang 6the distribution of stated values is skewed towards
the highest bid
a Interpretation of ordered probit
regres-sion estimates:
The parameter estimates are presented in
Table 3 for both the full (unrestricted) model with
all independent variables and the final (restricted)
model with only significant explanatory factors
The results from the full model reveal that there
are seven significant variables: four socioeconomic
factors (MARRIED, EDU, EMPLOY, and INC)
and three behavioral factors (ENVQUAL,
EN-VTHREAT and BEN3) The Likelihood Ratio (LR)
Chi square goodness of fit statistics of the two
models are 50.82 and 43.81, respectively, and
sig-nificant at 1% level These test results indicate
that the H0 hypothesis of all estimated
parame-ters equal to zero is rejected, and that the model
specification is appropriate and has a power to
ex-plain for the variation of WTP choice
b Mean of expected willingness to pay:
To eliciting the WTP in monetary values, it is necessary to rescale coefficients as indicated in the previous section The re-calibrating process is described in Table 4 (see next page)
Table 4 shows that the coefficient m has a pos-itive sign and is significant at 1% level and the intercept term derived from this regression is also significant at 5% The model has a well fit at R-squared = 0.96 Then, the expected WTP and mean WTP for plastics recycling from the final WTP model are calculated by using equations (5) and (6) as follows:
= 43.193 or VND 43,190 per year Since there are no previous studies on WTP for plastics recycling in HCMC, it is impossible to compare the empirical findings with others and
Table 3: Ordered probit model estimates for parameters explaining WTP
Note: figures in parentheses are standard errors of the estimates
*, **, *** denoted level of significance at 10%, 5% and 1%, respectively.
Trang 7discuss the performance of the analysis overall.
From 452 observations including true zero bids,
we obtain a mean willingness to pay an additional
charge in waste collection fee around VND43,200
per year or VND3,600 per month This is a
rea-sonable price in comparison with the average
monthly waste collection charge of VND13,000
ob-tained from the survey
c Marginal change of WTP:
In order to examine the change in the
pre-dicted probability of WTP by a marginal change
in one explanatory variable, others remain
un-changed, the MEOPROBIT module in STATA was
used (Cornelissen, 2006)
It is seen that being married decreases the
pos-sibility of paying for high bids VND50,000 (1.6%)
and VND72,000 (8.9%) The marginal effect of
dummy MARRIED is significant at 5% for most
bids Unemployed respondents have the negative marginal effects on the last two WTP categories, but positive effects on all the remaining bids However, EMPLOY is insignificant for the bid of VND50,000 Marginal effects on WTP are also stronger for EMPLOY than for the MARRIED (Table 5)
For the two categorical variables INCOME and EDU, the pattern is reverse to the socioeconomic dummies Higher education level has the highest positive marginal effect on the highest bid (VND72,000) by 7.8% and decreases the possibil-ity of being willing to pay for the lower yea-saying bid (VND12,000) by 4.1% A marginal increase in income will increase the probability of willingness
to pay the highest bid (VND72,000) by 6% IN-COME is the only variable having marginal ef-fects significant at 1% for every bid
Cut points from STATA
oprobit
Midpoints of thresholds in
mone-tary metric z* = (tL+ tU)/2
Linear regression z* = mz + c (m = s)
/cut4 = 0.9656855 (36 + 50)/2 = 43 Prob > F = 0.0035
/cut5 = 1.624124 (50 + 70)/2 = 60 R-squared = 0.9596
Table 4: Defining standard deviations and intercept
Table 5: Marginal effects of ordered probit model
Trang 8Marginal effects of ‘High concern about the
en-vironmental quality’ ENVQUAL dummy indicate
that consumers are more likely to pay lower prices
(1.3% to 6.3%) and less likely to pay the highest
price (13.4%), if they are ‘seriously’ or ‘somewhat
seriously’ concerned on the current ambient
envi-ronmental quality
Relative to those who are ‘seriously’ or
‘some-what seriously’ concerned about the threats from
plastic wastes to the environment, the marginal
effects of ENVTHREAT are positive on the two
highest bids (5.5% to 16.3%) Similarly, ‘High
level of agreement’ in the benefit of plastics
recy-cling, i.e ‘help keeping surrounding clean,’ BEN3
dummy variable, has positive effect on the highest
bid (12.9%) This implies that consumers who
‘strongly agree’ or ‘somewhat agree’ with this
ben-efit are more likely willing to pay VND72,000
(12.9%) In contrast, those who with ‘neutral to
low level of agreement’ are willing to pay lower
bids, i.e VND12,000 (7.4%) and VND24,000
(1.7%)
Among the three behavioral factors, i.e
EN-VQUAL, ENVTHREAT, and BEN3, all other
things being equal, the ENVTHREAT dummy
tends to have strongest marginal effects over WTP
categories than the other two variables The result
suggests that consumers with higher concerns
about the threats from plastics waste are willing
to pay more than those who are concerned about
the environment quality and the surrounding
cleanliness as a benefit from plastic wastes
recy-cling
5 Policy implication and recommendation
Recycling plastics would result in costs to the
waste management agencies and recyclers, yet
en-hance an eco-friendly environment The extra
amount paid by consumers aims to cover the cost
of recycling plastics As presented above, the
av-erage expected WTP of consumers is of
VND43,200 per year Thus, the policy makers
should consider whether the charge policy applies
on household-based unit or on adult individuals in
the coming development plans Moreover,
recy-cling is not only the responsibility of the
con-sumers but also of the Government – policy
makers, the functional environmental agencies and the plastics producers Thus, there should be parallel action programs from all entities so that the environmental quality enhancement plan would be implemented simultaneously
According to the individuals’ opinions, the best solutions to handling of plastic wastes were a higher monthly solid waste collection fee and a surcharge/environmental tax imposed on products containing plastics as perceived by 46% and 35%
of the respondents, respectively However, in order to implement these two solutions, more con-sideration and measurements should be carried out so that the charges would be well affordable for both consumers and producers Besides, stop-ping supply of free plastic bags in supermarkets and improving the deposit-refund system on plas-tic items were also possible solutions stated by 32% and 24% of the respondents, respectively
These two later solutions have a same character-istic in which consumers do not have financial re-sponsibility, but environmental awareness instead
Hygiene quality and safety standards of recy-cled products are highly concerned Because the products are indeed made from disposals which
Trang 9could have been mixed with other wastes, such a
low quality treatment process could even endanger
human health Thus, in order to implement any
plan, one should introduce guarantees in quality
standards to ensure that the recycled products
would not have negative effects on human health
A well-managed process for the collected funds
should be considered seriously and efficiently by
policy makers This matter in fact was mentioned
in most of respondents’ opinions collected from the
survey Respondents indicate that a more
trans-parent and efficient program management is
strongly necessary It is also the main reason of
most protest zero responses
Last but not least, because a large proportion
of consumers are still new to and not very familiar
with environment protection programs, especially
those asking for their financial responsibility, it
is necessary to ensure a wide propagation about
such programs and their necessity via a range of
possible approaches Regarding the surveyed
re-spondents’ preferences, telecommunication/ radio
programs and conferences, and TV news programs
are mostly preferred for information channels
The next important channels are websites, while
environmental programs run by institutions,
func-tional agencies, and local authorities also play an
important role in which people will have more
chances to shift from perception to action
Possible solutions to plastic wastes include:
im-posing some surcharge/tax on plastic items,
stop-ping the supply of free plastic bags in
supermarkets, improving the deposit-refund
sys-tem on plastic isys-tems (e.g plastic bottles), and
in-creasing the monthly solid waste collection fee
However, whether consumers have to pay an
in-crement in monthly waste collection charge or
they have to pay some surcharge or tax on plastic
items together with manufacturers, these policies
take into account the financial obligation from the
users’ side, yet do not reflect the attitudinal
re-sponsibility of consumers and role of Government
Thus, in order to implement these two solutions,
more consideration and measurements should be
carried out so that the charges would be well
af-fordable for both consumers and producers Also,
it is necessary to apply simultaneously a variety
of solutions, especially awareness inspiration and education, before taking into account financial re-sponsibilities such as surcharges, taxes or incre-ment in wastes collection charges The same characteristic found in solutions of stopping the supply of free plastic bags and improving the de-posit-refund system on plastic items is that con-sumers do not have financial responsibility, but environmental awareness instead, while policies that emphasize the role of Government and func-tional agencies are highly voted by the respon-dents and worth implementation Encouraging re-using plastics and finding alternatives to plas-tics products are possible solution as well
6 Conclusion The study presents a CV approach with an an-chored payment card technique to measure con-sumers’ WTP for plastics recycling in HCMC, Vietnam The first significant finding in this study
is that most consumers (90%) are highly con-cerned about the current ambient environment quality and the threats caused by plastics wastes
to the environment The results from the ordered probit regression show that the mean expected willingness to pay an additional charge for plastic recycling is VND43,200 per year Secondly, the re-sults show that behavioral factors have more in-fluences on the consumers’ WTP A marginal increase in the consumers’ perception towards the threats from plastic wastes to the environment has the strongest effect on the probability of WTP
in comparison to the other two behavioral vari-ables, which are the concerns about the ambient environment quality Notably, income plays an im-portant role in determining consumers’ WTP Higher income and higher educated consumers are likely willing to pay higher bids Marital status and employment are also significant factors but have opposite signs for the marginal effects on the predicted probability of WTP Moreover, a number
of possible solutions to plastic wastes problem were also investigated via voting of the respon-dents in which two solutions suggest financial re-sponsibilities and two others take into account consumers’ awareness of disposing wastes and habit of using plastics Media and
Trang 10telecommunica-tion are the most potential channels to propagate
and disseminate information among plastics
end-users regarding threats from plastic wastes, the
need for recycling and any available plans/policies
relating to the problemn
Notes:
(1) The Saigon Times Online, Accessible on Oct 7,
2010; Available at:
http://www.thesaigontimes.vn/Home/thoisu/doi-song/25510/
(2) True zero responses reflect the valueless of
amenity, where as protest zero responses are placed
when respondents provide nay-saying due to some
as-pects of the scheme though they find the positive value
of the amenity The reason of a respondent placing
protest vote may be because he/she does not fully trust
the proposed service, or he/she may think that the project
is unreliable (Fonta et al., 2010).
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