Rationale
Van Phuc handicraft village boasts a rich weaving tradition, with over 700 establishments dedicated to silk production and more than 22 focused on daily bleaching and dyeing processes Since the early 1990s, traditional looms have been largely replaced by industrial ones, significantly boosting production levels compared to traditional textile methods However, while this shift has provided immediate benefits, it has also led to long-term health concerns for the local community, particularly due to noise pollution.
In the past, artists utilized natural dyes from plants, leaves, flowers, and fruits, but today, villagers have shifted to chemical materials for their textile production, primarily using silk, polyester, cotton, and mixed fibers The weaving process now involves numerous harmful chemicals, including Javen, CH3COOH, and various dyes, resulting in significant water pollution as untreated wastewater is discharged directly into the Nhue River The levels of BOD and COD in the effluent from Van Phuc village far exceed allowable standards, contributing to severe environmental degradation Additionally, the bleaching stage of silk production releases substantial contaminants, leading to a high prevalence of respiratory, eye, gynecological, and gastrointestinal diseases among workers Noise pollution is also a major concern, with levels reaching 100 dB due to machinery operations Therefore, improving the environmental conditions in Van Phuc handicraft village is both essential and urgent.
The concepts of willingness to pay (WTP) and the contingent valuation method (CVM) play a crucial role in the economic valuation of environmental goods WTP represents the maximum amount an individual is willing to pay for a good, reflecting its perceived value (DFID, 1997) This straightforward principle, grounded in conventional economic theory, allows for the comparison of benefits and costs in monetary terms Environmental economists have effectively utilized this approach to quantify gains and losses in situations where market prices are unavailable (Emma J Frew et al., 2005) WTP extends to various environmental resources, such as water quality and natural resources, based on the assumption that environmental values are determined by human perception Economic methods can estimate WTP in relation to changes in environmental quality and resource use, and its application in evaluating healthcare technologies and environmental issues is growing, making WTP a valuable tool in interdisciplinary research.
CVM, or Contingent Valuation Method, is a widely utilized approach for estimating the economic values of various ecosystem and environmental services, encompassing both use and non-use values As the most prominent method for assessing non-use values, it has also sparked considerable debate within the field of non-market valuation This method involves conducting surveys to directly inquire how much individuals would be willing to pay for specific environmental services or, alternatively, the compensation they would accept to forgo these services.
Contingent valuation (CV) is a stated preference method that assesses individuals' willingness to pay for specific environmental services based on hypothetical scenarios Unlike revealed preference methods, which infer values from actual choices, CV relies on direct responses about what people claim they would do This reliance on stated intentions highlights both the method's strengths and weaknesses, as it reflects personal values rather than observed behavior.
The research titled “Household Willingness to Pay for Environmental Improvement in Van Phuc Handicraft Village – Ha Noi” employs the Contingent Valuation Method (CVM) to assess local residents' perceptions and attitudes regarding current environmental challenges and their commitment to enhancing environmental quality in the region.
Aim and Objectives
The purpose of this research is to understand the household’s willingness to pay for environmental improvement in Van Phuc handicraft village – Ha Noi
Specific objectives are: a) To identify environmental issues emerging in Van Phuc handicraft village –
This article focuses on assessing households' willingness to pay (WTP) for environmental improvements in Van Phuc handicraft village, Hanoi It aims to analyze the factors influencing the level of WTP among residents and provide recommendations for enhancing the environmental quality in this traditional handicraft community.
Scope and limitation
The study conducted in Van Phuc ward, Ha Dong district, Hanoi, aims to assess local environmental issues and estimate residents' willingness to pay (WTP) for improved environmental quality using the Contingent Valuation Method (CVM) It also analyzes how various factors influence WTP, encompassing both individuals directly involved in silk weaving and those indirectly affected by environmental conditions.
Prepared questionnaires were used to interview directly people live in Van Phuc handicraft village during the period from March to early May 30/2015.
Research structure
Besides the introduction and conclusion, this thesis includes 3 chapters:
Chapter I addresses the essential aspects of valuing environmental resources, outlining various valuation methods It concludes with an in-depth exploration of the contingent valuation method (CVM), highlighting its significance in assessing the economic value of environmental assets.
Chapter II primarily addresses the methods of data collection and analysis, detailing the necessary methodologies for this study and the application of the regression model.
Chapter III: research results and discussion
This chapter explores the natural and socioeconomic features of Van Phuc handicraft village, followed by an analysis of survey results regarding the factors influencing households' willingness to pay (WTP) Concluding with recommendations, it aims to enhance management practices and improve the protection of environmental resources.
LITERATURE REVIEW
Environment
There are many different perceptions and concept of environment expressed by different organizations and individuals
According to Albert Einstein (1870 - 1955 Nobel Economics- 1921), “the environment is everything except me”
According to Mans and Langenhim (1957), the environment comprises various elements that influence living organisms For instance, flowers thrive in forests, shaped by specific conditions including temperature, light, air, soil, minerals, trees, animals, and wind.
Joe Whitenney (1993) emphasizes that the environment encompasses all external factors affecting human survival, including soil, water, air, sunlight, forests, seas, ozone, and biodiversity.
The environment encompasses the various conditions and external factors that influence the life and evolution of living organisms Life is expressed through metabolism, energy utilization, information processing, genetic variation, adaptation, development, and ultimately, destruction.
The natural environment encompasses various elements, including material factors that vary in space, energy sources that regulate these factors, and the dimension of time Key volatile elements include soil, water, air, and biological, geological, and climatic conditions The environment is composed of three distinct spheres.
The atmosphere is the layer of air surrounding the Earth, categorized into various levels based on altitude and temperature It plays a crucial role in protecting living organisms from harmful solar radiation and maintaining the Earth's thermal balance Additionally, the atmosphere facilitates the global hydrological cycle, supplies oxygen essential for life, provides carbon dioxide for photosynthesis, and stores nitrogen.
- Hydrosphere: the surface area of the entire earth including oceans, seas, rivers, streams, ponds and lakes
- Geospatial: the hard outer rocky crust of the earth
The environment is a vital resource that provides essential services for the economy, including water supply for drinking, production, and irrigation As a public good, it allows everyone to utilize resources like the atmosphere without diminishing access for others; for instance, while everyone has the right to breathe, no one can restrict others from doing so Currently, many environmental services are offered at little or no cost, leading to overuse and unintentional harm to the ecosystem According to Vietnam's environmental protection law (Article 4 - 55/2014/QH13), organizations, households, and individuals must financially contribute to environmental protection when they utilize or benefit from environmental resources Therefore, establishing a pricing mechanism for environmental services is crucial for the rational allocation and sustainable use of resources, as well as for the protection of the environment.
Environmental valuation assigns monetary values to goods, services, and the impacts of environmental changes, enabling us to quantify effects often overlooked in cost-benefit analyses This process helps identify how much individuals or society are willing to pay for environmental resources and services Understanding the valuation of environmental resources is crucial, and we will explore key aspects in the following sections.
The total economic value of environmental resources
Incorporating environmental concerns into economic decisions requires two essential steps: first, comparing "with" and "without" project scenarios to assess the physical, ecological, and social impacts of an economic activity, which involves collaboration among engineers, biologists, and social scientists; second, economically valuing these identified impacts to complete the environmental-economic analysis.
The total economic value (TEV) of a resource encompasses both its use value (UV) and non-use value (NUV) Use value can be further categorized into direct use value (DUV), indirect use value (IUV), and option value (OV), which represents potential use It's crucial to avoid double counting the value of indirect supporting functions alongside the resulting direct use value.
Or TEV = [DUV + IUV + OV] + [NUV]
Figure 1.1 Categories of economic values attributed to environmental assets
Figure 1.1 shows the disaggregation of TEV in schematic form A short description of each valuation concept and a few typical examples of the underlying environmental resources, are provided:
•direct use value is the contribution to current production/consumption;
•indirect use value includes benefits from functional services that the environment provides to support current production/consumption (e.g., ecological functions like nutrient recycling);
•option value is the willingness to pay for an unutilized asset, simply to avoid the risk of not having it available in the future; and
Non-use value refers to the willingness to pay for benefits that are not tied to the actual use of an asset This includes existence value, which is derived from the satisfaction of knowing that an asset exists, regardless of any intention to utilize it.
Economic theory defines Total Use Value (TUV), but there is significant overlap and ambiguity in its breakdown categories, particularly concerning non-use values The figure illustrates how option values and non-use values are interconnected While these categories serve as a useful guide, the primary objective of practical estimation is to measure TUV itself rather than its individual components.
The distinction between use and non-use values can be ambiguous, with non-use values often tied to altruistic motives These motives include intergenerational altruism (the bequest motive), interpersonal altruism (the gift motive), stewardship (rooted in ethical considerations), and "q" altruism, which posits that resources have an intrinsic right to exist This last definition extends beyond traditional economic theory, suggesting that welfare considerations should encompass more than just human utility.
Individuals' willingness to pay significantly contributes to the total economic value they assign to environmental resources This valuation is heavily influenced by the critical question of how much they are prepared to spend.
The methods for valuation of environmental resources
The environment serves essential functions, including resource provision, waste absorption, living space, and aesthetic landscaping, each holding intrinsic value While the economic function of resource provision is reflected in market prices, other vital functions lack a monetary valuation This oversight has resulted in over-exploitation, depletion of natural resources, and environmental pollution To address these issues, various methods for assessing the value of environmental resources have been developed, aimed at promoting sustainable and efficient use.
* The concept of analyzing the benefit - cost
The main method to estimate the “Household’s willingness to pay for environmental improvement in Van Phuc handicraft village – Ha Noi” is the Contigent Valuation Method.
Consumer surplus
Economist Paul A Baran introduced the concept of "economic surplus" to address the complexities introduced by monopoly capital Alongside Paul Sweezy, Baran emphasized the significance of this concept, highlighting its alignment with Marx's labor theory of value and its complementary relationship to Marx's surplus value.
Consumer surplus is represented on a standard supply and demand diagram as the triangular area above the equilibrium price and below the demand curve This illustrates that consumers are willing to pay more than the equilibrium price for the first unit of a good, and slightly less for subsequent units, yet they ultimately pay the equilibrium price for each unit purchased.
Producer surplus is represented in the supply-demand diagram as the area beneath the equilibrium price and above the supply curve This illustrates that producers were willing to sell the first unit at a price lower than the equilibrium price, while the second unit could have been sold at a higher price, still below the equilibrium Ultimately, producers receive the equilibrium price for all units sold, highlighting the benefit they gain from selling at this market price.
Figure 1.2 Consumer surplus illustrating consumer (red) and producer (blue) surpluses on a supply and demand chart
Consumer surplus represents the gap between the highest price a consumer is willing to pay and the actual price paid for a product When consumers are willing to pay more than the asking price, they experience a greater benefit from their purchase A prime example of a product with significant consumer surplus is drinking water, as individuals would pay substantial amounts for it due to its necessity for survival The consumer surplus is determined by the difference between the potential price they would pay in a dire situation and the current price It's important to note that the utility of the initial liters of drinking water is extremely high, as they are essential for life, resulting in greater consumer surplus for these early liters compared to subsequent ones.
The total maximum price a consumer is willing to pay for a specific quantity of a good is calculated by adding the highest price they would pay for the first unit, the reduced maximum price for the second unit, and so on for each subsequent unit.
Prices generally trend downward, influenced by individual demand curves Consumers purchase quantities that maximize their consumer surplus, which is the total of the differences between their maximum willingness to pay and the market price for each unit The highest consumer surplus occurs when consumers buy the largest number of units, ensuring that even for the last unit, their willingness to pay meets or exceeds the market price.
The aggregate consumer surplus represents the total benefit that all individual consumers receive from purchasing goods at market prices, illustrated by the intersection of the demand and supply curves in the accompanying graph.
Willingness to Pay
Willingness and ability to pay form the cornerstone of the economic theory of value, suggesting that valuable resources, including environmental assets like water quality and natural resources such as trees, are worth investing in This theory hinges on the assumption that environmental values are shaped by human perceptions; thus, the worth of the environment is determined by societal beliefs Economic techniques can effectively quantify willingness to pay, linking it to variations in environmental quality and the utilization of natural resources.
Consumers typically pay the market price (MP) for goods and services, but some are willing to pay more than the market price, reflecting their individual willingness to pay (WTP) This willingness to pay indicates the level of satisfaction a consumer derives from a product or service Demand is represented by the "willingness to pay" line, which serves as a basis for assessing social benefits derived from consumption The area beneath the demand line, extending from zero to the quantity consumed (Q*), encapsulates the total willingness to pay, illustrating the relationship between consumer satisfaction and demand.
WTP = MP + CS With: WTP: The willingness to pay
Figure 1.3 The willingness to pay and consumer surplus
Figure 1.3 illustrates that the market price for service/commodity X is P*, applicable to all consumers However, individual A is willing to pay a higher price, Pa, which exceeds P* The total benefits received by individual A are represented by areas (a) and (b), where area (a) denotes the consumer surplus and area (b) reflects the total cost incurred by individual A for utilizing the product.
Consumers experience a consumer surplus because they pay the same price for each unit of goods, despite the fact that the value of each unit decreases according to the law of diminishing marginal utility This means that the utility derived from the first unit of goods is higher than that from subsequent units, resulting in consumers gaining additional utility from each unit purchased before the last one.
The willingness of individuals to pay for environmental goods remains unaffected by market prices, as these goods are often public in nature and lack a defined market value Consequently, assessing individuals' willingness to pay requires alternative methods, as there is currently no standard measure available to determine the monetary value they associate with such goods.
RESEARCH METHODS
Methods of data collection
The data on the eco-social characteristics of the study area were taken from the report of municipal government and the documents related to the study
Primary data were gathered through field observations and interviews conducted via questionnaires and sampling, targeting individuals with an income A contingent valuation survey must provide a comprehensive description of the good or service being evaluated, along with hypothetical changes, and include questions regarding respondents' willingness to pay, as well as their demographic characteristics such as age, income, and education It is essential to specify the payment method, whether through a general tax, voluntary donation, or entrance fee An example question could be: "Are you willing to pay for the proposed improvement in environmental quality in your area?" Additionally, follow-up questions should explore the motivations of those unwilling to pay, distinguishing between protest votes—where respondents object to the scenario or payment method—and those who perceive no value in the good Typically, protest votes are excluded from statistical analysis, as they do not accurately reflect the true economic value of the good.
Object of study of 120 random people lives (representing for 120 households) in the Van Phuc handicraft village – Ha Noi (Appendix 1).
RESEARCH RESULTS AND DISCUSSION
Basic information about Van Phuc Handicraft village
3.1.1 Location, physical and socio-economic condition
Van Phuc, also known as Ha Dong silk village, is a traditional handicraft village that became a ward of Ha Dong town on November 1, 2003, under Government Decree 107/ND-CP Covering an area of approximately 1.43 km², Van Phuc is home to over 14,620 residents across more than 4,000 households, and is situated about 10 km from the center of Hanoi The village is bordered by Ngoc Truc and Dai Mo communes to the northeast, Quang Trung to the west, and is surrounded by the Nhue River to the east and south Renowned for its ancient silk weaving traditions and distinctive Vietnamese patterns, Van Phuc benefits from the favorable climate of the Red River Delta, characterized by a tropical monsoon with cold winters, an average temperature of 23.1 - 23.5°C, and annual precipitation ranging from 1,521 to 1,676 mm, making it ideal for the thriving silk craft industry year-round.
Nestled along the Nhue River, Van Phuc Silk Village preserves its ancient charm with features like village wells adorned with lotus flowers and a centuries-old banyan tree Renowned for its silk weaving heritage, Van Phuc is celebrated for "Ha Dong Silk," a staple referenced in classic poetry Many local households still utilize traditional looms alongside modern mechanical ones, showcasing a blend of history and innovation in their craftsmanship.
The annual "Kago spin" festival is a cherished tradition that honors those who taught the art of silk weaving, while also instilling values of education, solidarity, and love for one another, their families, and their communities.
Van Phuc Ward is committed to education, with primary and junior secondary schools ensuring that all children are enrolled Additionally, the ward has established a clinic that meets Health Ministry standards, providing care to over 13,000 patients and focusing on initial healthcare, epidemic prevention, and control The expanded immunization program in the area also achieves a 100% coverage rate.
Van Phuc silk gained international recognition at the Marseille Fair in 1931 and the Paris Fair in 1938, becoming a symbol of sophistication in the French Indochina region This luxurious silk quickly gained popularity not only in France but also in countries like Thailand and Indonesia From 1958 to 1988, Van Phuc silk products were primarily exported to Eastern Europe, and since 1990, they have reached a global market, showcasing the enduring appeal of this exquisite fabric.
Figure 3.1 Artisan and weaving loom
Van Phuc handicraft village, renowned for its rich weaving tradition, boasts over 700 establishments dedicated to silk production, with more than 22 focused on bleaching and dyeing Since the early 1990s, the introduction of industrial looms has significantly boosted production, creating stable employment for over 3,000 local workers and an additional 400 from surrounding areas The village annually produces between 2.5 to 3 million square meters of fabric, offering a diverse range of silk items, including Van, Sa, Que, and Satin in various colors and designs The primary products are silk and satin, with prices ranging from 50,000 to 80,000 VND per meter for silk and 70,000 to 100,000 VND per meter for satin, depending on quality.
Van Phuc ward not only features over 150 booths showcasing products but has also diversified its business models with attractions like Silk Street, Food Street, and an ornamental plant market This initiative aims to harness the cultural, religious, and economic potential of the area to foster village development, with silk production revenue reaching an estimated 35 billion VND annually A survey revealed that 15 households engaged in small-scale textile dyeing operate within residential areas, utilizing 5-6 textile machines per household for approximately 10 hours a day The average investment in equipment and buildings ranges from 80-100 million VND per household, while loom costs vary significantly from 7-20 million VND Additionally, production rates differ, with Vietnamese looms yielding about 30 meters of silk per month, compared to 40 meters from Korean looms.
Van Phuc Ward is home to three production enterprises: Ha Dong Textile Mills, Ha Dong Wool Joint Stock Company, and Tuan Hai Cooperative These companies utilize modern technology and emphasize environmental sanitation during construction However, their pollution control measures are inadequate, resulting in persistently high levels of sewage pollution.
Van Phuc is a historic handicraft village renowned for its silk and fabric products The growth of such villages has significantly enhanced the living standards of local residents However, in recent years, the increased production scale has led to serious environmental concerns, as untreated wastewater and household waste are adversely affecting the health and quality of life in the community.
Figure 3.2 Untreated wastewater has been directly discharged into the environment
In the past, village artists relied on natural dyes and bleaches derived from plants, leaves, flowers, and fruits However, modern practices have shifted towards the use of chemical dyes and materials, such as polyester, cotton, and blended fibers, for weaving textiles like coarse fabrics, towels, and gauze This transition involves the use of harmful chemicals, including Javen, H2O, CH3COOH, H2S, acid dyes, sulfur dyes, and direct dyes, leading to significant wastewater production and environmental pollution Additionally, the silk production process contributes to pollution, as bleaching results in the release of approximately 25% impurities, with each meter of silk weighing 80 grams discharging around 20 grams of contaminants into water sources.
In Van Phuc, the silk weaving industry consumes a significant amount of water, with an average household using 2.84 m³ per day for production This includes 0.18 m³ for bleaching, 0.22 m³ for dyeing, 0.4 m³ for cleaning, and 2.04 m³ for other wastewater Notably, the levels of Biochemical Oxygen Demand (BOD) and Chemical Oxygen Demand (COD) in this wastewater exceed permitted limits, raising environmental concerns.
Laborers in villages are exposed to toxic chemicals without adequate protection, leading to a high risk of disease Common illnesses include respiratory tract diseases (10-20%), eye diseases (10-20%), gynecological issues (10-30%), and gastrointestinal diseases (10-20%) In 2011, Van Phuc ward reported 463 cases of upper respiratory infections, 36 cases of bronchitis, 87 cases of pneumonia, and 82 cases of diarrhea, with 15 out of 42 cancer-related deaths Most cancer victims, primarily from liver and oral cancers, were aged 40-60, representing nearly 40% of the total deaths in Van Phuc.
sample household reated information
*Note:Each interviewee was representing for a household
The average monthly income for the 120 households surveyed is approximately 3.282 million VND per person, with those involved in traditional handicraft villages earning an average of 1.16 million VND per person While the overall income levels of the respondents are considered moderate, they are adequate to meet basic needs within the context of a traditional village.
The interviewees, aged between 24 and 78 years, have an average age of 47, indicating a mature understanding of both recognition and finance, which lends credibility to their responses.
Educational attainment among the interviewees averages 9.4 years of schooling, which corresponds to a secondary school level This level of education enables them to fully comprehend and think critically when responding to the questions presented.
The average household consists of five members, totaling 605 individuals across 120 households This indicates a moderate number of household members, which is typical for families with multiple generations living together or smaller family units.
In total 120 interviewees, there are 57 males, accounting for 47.5%; and 63 females, accounting for 52.5%
Table 3.1 The information related to the interviewees
Average income VND/household/year 198.600.000
Number of household members people 5
Family members involved in environmental protection people 15 12.5
According to Table 3.1, a significant portion of interviewees, 39.2%, are employed in handicraft and weaving roles within small factories and sewing workshops in the local area Additionally, another prominent occupation involves selling products from traditional handicraft villages.
The socioeconomic characteristics of interviewees significantly impact their willingness to pay (WTP) for enhancing the quality of local environmental resources.
The information related to household willingness to pay for environmental
Figure 3.2 shows that only 11 individuals, representing 9.2%, believe the environment is good This positive perception is primarily held by residents of Pho Lua street, a key tourist area known for selling local products, which contributes to a cleaner environment compared to other regions Additionally, those who live farther away from factories and sewing workshops also tend to have a more favorable view of their surroundings.
Figure 3.4 The rating of interviewees about the environmental situation (Unit: percentage)
A significant 22.5% of respondents, totaling 27 individuals, chose the option 'Don’t know/No comments,' indicating a notable indifference towards the environmental quality in their area This suggests a lack of interest or engagement with environmental issues among this group.
Waste from Industrial activities 22 37.9 transportation 1 1.7
A significant portion of respondents, 28 individuals representing 23.3%, believe that the environment is in poor condition, likely due to direct exposure to factory waste or a heightened awareness of environmental issues The primary concerns highlighted by the interviewees include waste generated from handicraft activities, which accounts for 34.5%, and waste produced by industrial operations, making up 37.9%.
The wastewater discharged from sewing workshops into the Nhue and Day rivers is a significant source of pollution, according to public opinion One commenter highlighted that environmental degradation is also influenced by transportation, which accounts for 1.7% of the issue This is particularly relevant for Van Phuc Handicraft Village, situated along the heavily trafficked 430 Highway, where a high volume of vehicles contributes to the pollution problem.
A significant 15.8% of respondents indicated that the decline in environmental quality is a reflection of public concern regarding environmental changes, which are typically negative However, the majority of individuals appear indifferent or less aware of the deterioration in environmental quality and its potential consequences.
Table 3.3 Impact of environmental pollution
Survey data reveals that all interviewees acknowledge the significant impact of environmental pollution on their community, particularly concerning their health and business operations This consensus highlights their awareness of the detrimental effects that pollution has on their well-being and economic activities.
Figure 3.5 Responder’s awareness of environmental services and payments for environmental services (Unit: people)
A recent survey reveals a limited understanding of environmental services and payment for these services among the population Notably, 61.7% of interviewees, totaling 74 individuals, reported a lack of access to information regarding environmental services This figure rises to 75%, or 90 people, when considering payment for environmental services Additionally, approximately 13% of respondents were unaware of the existence of environmental services and their associated payments Only 1.7%, or 2 out of 120 participants, remained neutral without expressing a clear opinion on their awareness of these concepts.
Table 3.4 Some environmental services has been known
Development of environmental monitoring reports periodically
Establish the proposals for environmental protection
According to survey data, only 24.2% of respondents, totaling 29 individuals, are aware of environmental services, primarily through propaganda Among those familiar with these services, 93.1% recognize environmental impact assessments, while 89.7% are aware of the periodic development of environmental monitoring reports Additionally, 41.4% noted the establishment of proposals for environmental protection Despite this, nearly all participants claimed some level of awareness regarding environmental services through promotional efforts.
(25 people – accounting for 86.2%), the following table shows the source of knowing environmental services of 29 people (from graph 3.2)
Table 3.5 Incoming source of information about environmental services
Figure 3.3 highlights the low level of training regarding environmental services and payments, with a significant 85.8% of individuals not participating in any related courses This lack of engagement indicates a limited understanding of environmental policies, primarily accessible through offices and sewing workshops that aim to promote awareness.
Figure 3.6 Proportion of people were participate in training in environmental services and payments for environmental services (Unit: percentage)
A survey revealed that 73.3% of respondents believe that everyone should contribute to the payment for environmental services, as all individuals benefit from environmental improvements Additionally, 30 participants indicated that government levels should cover these fees for the public's benefit, while only 25% of opinions suggested that the responsibility lies with hydroelectric companies, water companies, and ecotourism businesses.
Table 3.6 Awareness of interviewees on paying the fee for environmental services
Hydroelectric, water and ecotourism companies
According to survey data, all respondents acknowledge the significant advantages of fee benefits, confirming that they have reaped rewards from environmental services in various recognized forms.
Table 3.7 Forms of benefit from environmental services
Almost all respondents were aware of the fundamental benefits provided by environmental services; however, there was a lack of consensus on the willingness to pay for these services This discrepancy will be examined further in the following section.
estimation of The household willingness to pay for environmental improvement 48 3.4 analysis of factors affecting people’s WTP in van phuc handicraft village
The survey results indicate that most interviewees are open to investing in environmental services, while a minority expressed reluctance to pay for such services in their community.
Table 3.8 Number of agree and disagree for payments for environmental services
A survey revealed that only 11.7% of respondents opposed paying for environmental services Among the 14 households that disagreed, 100% cited inconsistency with family income as their primary reason, while only one household felt that local environmental conditions were not a concern Notably, all dissenting households belonged to the lowest income group among the 120 randomly interviewed households.
Table 3.9 Reason for not willingness to pay
Payments for environmental services are the responsibility of the government
Environmental situation in the local is not really a matter 1 7.1
The program cost too much 14 100.0
We have to pay too many fees already 4 28.6
A survey of 120 participants revealed that 88.3% (106 individuals) are willing to pay for environmental improvements, primarily to enhance their health However, only a small fraction (3.6%) expressed a willingness to contribute towards reducing community burdens The diverse motivations for their financial support reflect an increased awareness of their living environment.
Table 3.10 The reasons for the willingness to pay for environmental services
Reason for willingness to pay People Ratio (%)
Contribute to reducing environmental pollution
Reducing the burden to the community 7 3.6
(Source: survey data) Based on survey results, the willingness to pay of people in Van Phuc handicraft village are described in Table 3.11
Table 3.11 The level of willingness to pay of household
No.(i) The willingness to pay(WTP i )
( VND/Household/year) Frequency(n i ) Share
In a recent questionnaire conducted in Van Phuc handicraft village, the lowest willingness to pay (WTP) for environmental services was identified as 50,000 VND per household per year, reflecting the novelty of the payment policy and the absence of established charges Among the 106 interviewees, 20 individuals (18.9%) selected this amount as their preferred option, while 18 respondents (17.0%) opted for a higher payment of 100,000 VND per household per year The average willingness to pay was calculated using a specific formula to assess the overall value placed on these environmental services by the households.
With: : The average willingness to pay of interviewees i: The indicators of the WTP, i = 1 ÷ 22 wtpi: The WTP at i ni: Amount of respondents commensurate with the wtpi
Through the data collection and calculation, the average willingness to pay of
106 households for environmental improvement in Van Phuc handicraft village is
The average willingness to pay (WTP) among households is 201,083 VND per year, with a total WTP for the village amounting to 24,130,000 VND annually At 227,641 VND per household per year, this fee is relatively low when considering the benefits received.
The willingness to pay among the 106 interviewees varies significantly based on diverse perspectives and thought processes, with each level of contribution influenced by multiple objective factors The most prevalent reason identified among these factors is
A significant 86.1% of respondents indicated that affordability relative to family income is a key factor, while environmental protection was also highlighted as a priority Notably, only one interviewee emphasized the need to raise awareness about environmental importance, which may correlate with their willingness to contribute 1,000,000 VND per household annually.
Table 3.12 The reason for the chosen level of WTP
To help protect the environment 89 82.4
To raise awareness about the importance of the environment
Despite the modest contributions, residents of Van Phuc handicraft village demonstrate a strong interest in environmental issues and a desire for an improved living environment Following their agreement to pay for local environmental services, respondents were inquired about their preferred payment methods, as illustrated in Table 3.13, which summarizes the interviewees' opinions.
Table 3.13 Forms of payment for environmental improvement
Forms of payment People Ratio (%)
Submit to the population group leader 64 60.4
Submit to the trusted peers 1 0.9
According to survey data, 60.4% of respondents prefer to submit their contributions through a trusted group leader, a familiar figure who helps prevent phishing attempts.
3.4 ANALYSIS OF FACTORS AFFECTING PEOPLE’S WTP IN VAN PHUC
In Chapter II, specifically section 2.2.4, we analyze the WTP regression model, which incorporates variables such as income, education, occupation, age, gender, and household size in a linear framework Prior to estimating the coefficients, we assess the correlation among the independent variables to identify and eliminate any that are highly correlated with one another, ensuring a more accurate regression model.
Table 3.14 Correlation matrix between the independent variables
According to data analysis presented in Table 3.14, most correlation values among the variables are relatively low, with the highest correlation observed between Education (X2) and Occupation (D2) at an absolute value of 0.8613 This suggests that individuals with higher education levels tend to have better access to desired professions The model demonstrates strong properties as a simple multiple linear formation, evidenced by high R² values of 0.8905 and 0.8981 Additionally, the other variables show small correlation values, indicating no collinearity among them, which confirms that the independent variables included in the model are well-suited for analysis.
The analysis of factors influencing individuals' willingness to pay (WTP) for environmental services was conducted using regression models The final estimation results of this analysis are presented in Table 3.15.
*Note: If the household is not willing to pay for the environmental improvement, their willingness to pay will be counted as 0 VND/household/year
Figure 3.7 Result of the Regression Analysis using
Table 3.15 Summarized result of the Regression Analysis using STATA 11.0
Age of the interviewees (years) X1 -0.56 ns
Education level of the interviewees (years of schooling) X2 9.367 *
The number of household members
Gender of respondents (dummy variable) D1 5.115 ns
Occupation of the interviewees(dummy variable) D2 -81.492 **
(Source: data analysis) Note:***, **, *: Statistical significance at α = 1%, 5%, 10% ns: Non-statistical significance
As the result, Ftest = 198.25 shows that the model that we are determining is complete tight
The model's correlation coefficient (R²) is 0.8905, indicating that the variables of age, income, sex, occupation, and number of household members account for 89.05% of the variation in willingness to pay (WTP) Consequently, the remaining 10.95% of WTP variation is attributed to other factors not included in the model.
The analysis reveals that Age (X1) and Gender (D1) are not statistically significant variables, as indicated by their P-values exceeding 0.1 In contrast, Education (X2), Income (X3), number of household members (X4), and Occupation (D2) emerge as significant factors influencing the willingness to pay (WTP) for environmental services in Van Phuc handicraft village The findings affirm the hypothesis that WTP is positively correlated with income, education level, household size, and occupation The subsequent section of the research will delve into the impact of these variables on the willingness to pay for enhanced environmental quality.
Analyzing the statistical significance
The model estimation results indicate that 4 out of 6 coefficient variables significantly influence the willingness to pay (WTP) for environmental quality improvements in Van Phuc handicraft village Specifically, education, income, number of household members, and occupation play crucial roles in shaping WTP Among these factors, the dummy variable X4 exhibits the most pronounced impact on WTP.
Research indicates that individuals' willingness to pay (WTP) varies with their education level The estimated coefficient of 9.367, with a statistical significance at α = 0.1, demonstrates a positive correlation between education and WTP Specifically, when other factors remain constant, an increase of one year in education corresponds to an additional willingness to pay of 9.367 VND.
Higher levels of education significantly enhance individuals' awareness and understanding of environmental issues As people gain more knowledge through schooling, they become more conscious of the positive and negative impacts on their surroundings This increased awareness motivates them to contribute positively to environmental improvements and to address challenges when necessary When individuals observe improvements in environmental quality, they are likely to continue supporting initiatives that promote sustainability Conversely, if they notice a decline in environmental conditions, their education drives them to invest resources to mitigate these issues, demonstrating that those with more education are better equipped to engage with and respond to environmental challenges.
Estimation results indicate a significant disparity in the willingness to pay (WTP) based on individual income levels, with a positive coefficient (b3 = 1.345) that is statistically significant at α = 0.01 This suggests a proportional relationship between income and WTP, meaning that for every increase of 1,000,000 VND per year in household income, individuals are willing to pay an additional 1,345 VND per person annually for environmental services This correlation highlights that as income rises, so does the desire for improved quality of life, leading higher-income individuals to contribute more towards environmental benefits such as clean air, safe drinking water, and better health outcomes Consequently, those with greater financial resources are more inclined to invest in services that enhance their well-being.
Estimation results indicate a significant difference in households' willingness to pay (WTP) based on the number of members The estimated coefficient (b4 = -17.02) shows a negative correlation, meaning that as the number of household members increases, the WTP for environmental services decreases by 17,020 VND per person per year, assuming other factors remain constant Consequently, larger households face a greater financial burden regarding their contributions to environmental services.
The relationship between the number of members and willingness to pay (WTP) for environmental services is counterintuitive; typically, one would expect that more members would lead to higher costs for goods or services However, the environment is viewed as a unique commodity that is challenging to value, as many perceive it as a public good that should not incur charges.
Estimation results indicate a notable difference in the willingness to pay (WTP) between individuals engaged in handicraft/weaving and those in other professions The estimated coefficient of b4 is -81.492, with a statistical significance at α = 0.05, highlighting a negative correlation between WTP for handicraft/weaving compared to other jobs Specifically, when controlling for other factors, respondents involved in handicraft/weaving exhibit a WTP that is 77,642 VND lower per person per year than their counterparts in professions such as personnel officers or free business The average WTP, as derived from statistical analysis of the questionnaires, stands at 227,641 VND.
VND/person/year, of which WTP of handicraft/weaving was 162.450 VND/person/year, of the other jobs was 271,670 VND/person/year
The study examined the relationship between age and willingness to pay for environmental services in Van Phuc handicraft village, hypothesizing that older individuals would show a greater willingness due to their increased cognitive awareness of environmental quality issues However, the results indicated that age coefficients were not statistically significant, suggesting that age does not directly influence the willingness to pay This finding emphasizes that factors such as individual consciousness and awareness play a more critical role than age in determining one's willingness to invest in environmental services.
The study indicated that gender influences the willingness to pay for environmental services; however, the results revealed that the coefficients of the dummy variable were not statistically significant, suggesting no differences in willingness to pay between men and women in Van Phuc handicraft village.
Research indicates that several factors, including age, income, education level, household size, gender, and occupation, significantly influence the willingness to pay among residents of Van Phuc Handicraft Village.
-The higher the education level, the higher willingness to pay, or education level is proportional to the WTP
The annual income of a family significantly affects their willingness to pay (WTP) for environmental services This study demonstrates that there is a direct correlation between income levels and WTP; specifically, households with higher total annual incomes exhibit a greater willingness to invest in environmental services.
- The more of household members, the decrease of willingness to pay, or the amount of household member is inversely proportional to with the WTP
This study highlights the impact of career differences on willingness to pay (WTP), specifically comparing handicraft/weaving jobs to other professions The findings indicate that individuals in handicraft/weaving are willing to pay less than those in other occupations.
The study did not reveal the impact of age and gender on the willingness to pay (WTP) for environmental services in Van Phuc Handicraft village, possibly due to an insufficient sample size However, four statistically significant variables were identified, which serve as a foundation for proposing solutions aimed at enhancing the quality, protection, and development of environmental resources in the village.
Sustainable development is a unified vision for the country's growth, particularly in rural craft villages, as highlighted in the industrialization and modernization policies The government's Decree No 66/2006/ND-CP, dated July 7, 2006, emphasizes the importance of sustainable development in rural craft sectors This policy must be translated into actionable development strategies and measures By fostering sustainable practices, craft villages can enhance economic growth, create job opportunities, alleviate poverty, ensure social welfare, and improve the rural environment.
Sustainable development policies in craft villages must prioritize environmental protection, ensuring that production growth does not compromise ecological integrity for short-term gains It is essential that production benefits actively support environmental conservation efforts Stakeholders play a crucial role in this process, as their responsibilities include fostering practices that align economic development with sustainable environmental stewardship.
- Develop and propose mechanisms and policies on promoting rural crafts and environmental protection (MARD will be focal point);