Estimating Economic Costs of Municipal Solid Waste Management: Using Contingent Valuation Method

Abstract

This paper estimates the welfare loss due to improper municipal solid waste management (MSWM) in Tirunelveli Corporation, which is one of the fast-developing cities in Tamil Nadu. Much of the municipal solid waste stream in Tirunelveli is generated by urban dwellers, whereas landfills are often located in adjacent rural communities. Landfill disposal of municipal solid waste often creates external cost in Tirunelveli and the adjacent areas. The loss of welfare was estimated using econometric methods based on the Logit and Tobit models, which were used to introduce willingness to pay (WTP) to improve the quality of municipal solid waste management. The primary data collected through household surveys are used in the estimation of the models. Measuring external costs of municipal solid waste is very complex and the available methods of economic evaluation are often rudimentary. We have analyzed how the monetary value of health benefits could be increased by adopting an appropriate method of municipal solid waste management, which will be useful to policymakers to reduce vector-borne diseases among the urban population of Tirunelveli city. Variables, such as household income, family size, years of residence, distance from the landfill sites and the respondent’s education, sex and perception of health risks were significantly important in determining a household’s WTP to avoid such vector-borne diseases caused by rampant municipal solid waste. The empirical exercise enables us to measure man-days loss, wage loss and the number of hospital visits due to municipal solid waste management. Thus, this study addresses the current status and consequences of MSWM, which is a matter of concern in developing countries.