Economic Valuation of Private Sector Waste Management Services

Transcription

1 Journal of Sustanable Development Vol. 4, No. 4; August 011 Economc Valuaton of Prvate Sector Waste Management Servces Eugene E. Ezeblo (Correspondng author) Swedsh Unversty of Agrcultural Scences Southern Swedsh Forest Research Centre, Box 49, SE Alnarp, Sweden Tel: E-mal: Emmanuel D. Anmasaun Malmö Unversty, Department of Publc Health, Malmö, Sweden Receved: May 6, 011 Accepted: June 7, 011 do: /jsd.v4n4p38 Abstract Ths paper reports a study regardng households wllngness to pay for prvate sector sold waste management servces. The data orgnated from a contngent valuaton survey conducted n 4 households n Ilorn n southwest Ngera and was analysed usng tobt and censored least absolute devatons models. The use of a robust and consstent estmator to model zero wllngness to pay responses was dscussed. The results show that the respondents were wllng to pay more than one percent of ther household ncome per year. Ther wllngness to pay amount was nfluenced by ncome, educaton, actvtes of santary nspectors, house type and occupaton. The censored least absolute devatons model outperformed the tobt model. We suggest that government agences should be actvely nvolved n montorng actvtes of prvate frms regardng provson of waste management servces. The fndngs from ths study can help polcy-makers n desgnng a more sustanable waste management strategy n southwest Ngera, as well as n other developng countres. Keywords: Envronmental qualty, Local partcpaton, Sustanablty, Tobt model, Wllngness to pay 1. Introducton Increase n human populaton and ncome leads to an ncrease n demand and producton of goods (Varan, 010; Blanchard, 009) and consequently more waste are dscharged to the envronment. If waste s not properly managed t threatens envronmental qualty and publc health (Asase, 009). For example, harmful substances from mproperly dsposed waste can contamnate ground water. Ths often have health mplcatons especally for communtes n developng countres where some people drnk well water. Although, waste may occur n sold, lqud and gaseous states, however sold waste s the most conspcuous and can easly be notced by people, thus ths study has focused on sold waste management. Waste management servces n urban areas n some developng countres are often provded by governments, n the foreseeable future the government may not be able to undertake these servces because of dwndlng fnancal resources and reduced allocatons to waste management sector. Ths makes some form of prvate sector partcpaton desrable. The sector can provde the needed captal for nvestment n muncpal sold waste (MSW) management (.e. collecton and dsposal of sold waste) and ther nvolvement can help to ncrease effcency. An ntegrated approach n MSW management (Ahmed and Al, 004; Baud and Post, 001),.e. nvolvement of all stakeholders (e.g. government, prvate sector and resdents) can help reduce sold waste problems and promote sustanable waste management n developng countres. In order to sustan prvate sector partcpaton n MSW management there s a need to provde the sector wth ncentves (e.g. rewards). For example, ntroducton of user fees for prvate MSW servces,.e. urban resdents payng for prvate waste management servces. Before ntroducng user fees t wll be nterestng to examne whether urban resdents would be wllng to pay for prvate sector sold waste management servces. Benefts that people derve from effectve and effcent MSW management such as mprovement n envronmental qualty cannot be reflected n normal market prces (Anaman and Jar, 000) because t has the characterstcs of non-market prced good,.e. non-excludablty and non-rvalry (Harrs, 006; Ezeblo, 011). It s typcally estmated by means of non-market valuaton methods (Mtchell and Carson, 1989; Looms, 1993). The contngent valuaton method has been the most used non-market valuaton method for estmatng the economc value of non-market goods (Boman et al., 008; Ezeblo, 010; Carson, 004; Carson et al., 1996). It uses survey questons to elct people s preferences for non-marketed goods by askng them how much they would be wllng to pay for specfed mprovements or to avod decrements n them (Mtchell and Carson, 1989). Wllngness to pay for non-market goods s often charactersed by the presence of many ndvduals that would not be wllng to pay anythng at all. In ths case ordnary least squares regresson estmates wll be nconsstent as t fals to account for qualtatve dfferences between zero and postve wllngness to pay values (Greene, 003). Ths often results n coeffcent estmates that are based toward zero. To deal wth ths problem the tobt model (Tobn, 1958; Mwebaze et al., 010; Kmmel and Connelly, 007; Takehro, 008; Ezeblo et al., 010) 38

2 Journal of Sustanable Development Vol. 4, No. 4; August 011 has been wdely used. The tobt estmator (.e. maxmum lkelhood estmates) assumes that the error term s homoscedastc and normally dstrbuted. Msspecfcaton of the tobt model leads to nconsstence of the estmates (Robnson, 198; Hurd, 1979; Nelson, 1981; Goldberger, 1983; Arabmazar and Schmdt, 1981; Yoo et al., 001). One way of dealng wth the problem s to use estmaton methods (e.g. sem-parametrc) that provde consstent estmates when the error term s non-normal and heteroscedastc (Powell, 1984; 1986; 1994). Ths study contrbutes to the exstng lteratures (Yoo et al., 000; Huang et al., 1986; Chay and Powell, 001) regardng the applcaton of sem-parametrc method on censored data. Although, urban resdents valuatons regardng prvate sector partcpaton n muncpal sold waste (MSW) management can help polcy-makers to package waste management that mght be more acceptable and cost effcent, there are only few publshed studes on contngent valuaton regardng waste management n developng countres (e.g. Altaf and Deshazo, 1996; Rahj and Oloruntoba, 009; Murad et al., 007). The study reported n ths paper wll help to fll the knowledge gap. The paper has two major ams. The frst s to estmate households wllngness to pay for prvate sector sold waste management servces and ts determnants to mprove envronmental qualty, as well as promote sustanable waste management n Ilorn n southwest Ngera. The second am s to explore the use of consstent and robust estmator when estmatng a wllngness to pay equaton usng zero response data.. Materals and methodology.1 The study area Ilorn, the captal of Kwara State n southwest Ngera has an area of 100km² (Kwara State Ngera, 1997). Lke many tradtonal ctes n Ngera, Ilorn retans the characterstcs of tradtonal town alongsde a modern urban centre. The cty can be classfed nto three sub-areas (Aderamo, 000),.e. old resdental area, new resdental area and government reservaton area. The old resdental area s the ndgenous part of Ilorn whch s located n the central core area. The new resdental area s the post-colonal area located around the core area of the cty, whle the government reservaton area s the hgh status neghbourhood area. Varous types of human actvtes thrve n Ilorn. The actvtes nclude agrculture, tradng, transportaton and a host of other professonals. The human populaton of Ilorn was 41,000 n 195, but was estmated to be 30,000 n 1973 (Olorunfem, 198), 477,500 n 1980 (Adedbu, 1985) and 57,178 n In 006 the populaton of Ilorn was 766,000 (Natonal Populaton Commsson, 006). Ths suggests that the populaton of Ilorn s growng rapdly whch n turn has the tendency of ncreasng the amount of sold waste generated n the cty. Although, the Ilorn muncpal authorty have been responsble for waste management n Ilorn, ther actvtes have not been very effectve. There are about 19 dump stes n Ilorn (Kwara State Management Councl, 007) some llegal dump stes are stll scattered all over the cty, manly at road junctons and ntersttal spaces wthn neghbourhoods. These dump stes often appear, and dsappear after the natonal envronmental santaton days (second and last Saturdays of every month). Lke many envronmental project n Ngera (Ezeblo and Mattsson, 010) the Ilorn resdents are rarely nvolved n plannng waste management strateges. The Ilorn cty was selected for ths study because of the ncreasng populaton, urbanzaton and the ncrease n waste dsposal problems, thus makng t a good ste for the study of ths nature.. Survey desgn and data collecton The data collecton was made by means of hand-delvered questonnares and ntervews that were desgned and tested n a town outsde the study area. People who had no formal educaton were ntervewed based on the questons n the questonnare, whle people who had formal educaton were handed a copy of the questonnare. Pre-test surveys were conducted n Aprl 009 n thrty randomly selected households n a town outsde the study area. The focus groups, personnel of Waste Management Board and the people that were nvolved durng the pre-test surveys helped n the development of questons that were used durng the man survey. After the pre-test survey, some questons n the questonnare (e.g. wordngs regardng the valuaton queston and ndependent varables) were adjusted to capture concerns rased by survey assstants and respondents. The man survey was conducted durng the months of June and July 009. Sx survey assstants were recruted and traned for three days. The assstants were fluent n the local language (Yoruba) of people n the study area and were famlar wth the Ilorn cty. The Ilorn cty was dvded nto three sub-dvsons namely; the old resdental area, the new resdental area and the government reservaton area. Three hundred and thrty households were randomly selected for the survey (110 n each sub-dvson). If a resdent declned the questonnare/to be ntervewed, or there was no an adult ndvdual at the resdence contacted, we proceeded to the next resdence untl the desred sample sze of respondents was acheved. The questonnares/ntervews were admnstered at both weekdays and weekends, as well as durng workng hours and after workng hours, n order to nclude as many categores of the populaton as possble durng the survey perod. Three hundred and twelve questonnares were handed out to Ilorn resdents, only 18 (70%) responded to the questonnare after two remnders. All people (18) who had no formal educaton agreed to be ntervewed. In total, 36 (7%) responded to the survey and 4 of the responses were useable for statstcal analyss. Ths reveals that only about 5% of the responses were not ncluded n the analyss and t should not have a sgnfcant mpact on the results. After descrbng the study (.e. prvate provson of waste management servces to mprove envronmental qualty) the respondents were asked a seres of soco-economc questons (household sze, educaton and ncome, Publshed by Canadan Center of Scence and Educaton 39

3 Journal of Sustanable Development Vol. 4, No. 4; August 011 as well as age, occupaton, martal status and gender).they were asked about the type of house they lve and the travel tme from ther resdence to the nearest dump ste. The respondents were asked whether santary nspectors do vst ther areas. Ths was followed by the valuaton queston (see secton.3) regardng how much they would be wllng to pay for prvate sector sold waste management servces..3 The valuaton queston The hypothetcal market scenaro was developed to descrbe ncrease n frequency regardng collecton of sold waste and consequently mprovement n envronmental qualty. Ths would gve Ilorn resdents access to a cleaner envronment and a lower rsk of waste related alments. The people n the study area are used to monthly payment for servces such as electrc power. Therefore the monthly payment for sold waste collecton servces (payment vehcle), was not new to the respondents. Before ths study we had doubt about whether the people wll respond to the valuaton queston because Ilorn resdents are not used to payng for sold waste management servces. After descrbng the hypothetcal market scenaro and the payment vehcle, the respondents were asked whether they were wllng to pay anythng at all for prvate sector sold waste management servces. If the answer was no, the respondents were asked to gve the reason(s). If the answer was yes, the respondents were asked to choose an amount of money from a payment lst (50, 100, 150, 00, 50, and 300 Ngeran Nara) that corresponds to the maxmum amount they would be wllng to pay monthly for the prvate sector sold waste management servces. The payment lst was generated from the suggestons and concerns that were rased by focus groups, some personnel of Waste Management Board and people who partcpated n pre-test surveys. 3. Conceptual framework and statstcal analyss Presently, the management of sold waste n Ilorn s manly the responsblty of the government. Ths appears not to be very effectve and effcent because t s common to see dump stes n Ilorn lttered wth waste materals. We assume that f prvate frms partcpate n sold waste management n Ilorn t wll ncrease competton, effcency and consequently mprove envronmental qualty. The respondent wllngness to pay for prvate sector sold waste management servces WTP can be defned usng the ndrect utlty v functon: P Q, y v P, Q, y WTP v, (1) where, P s prces of all the market goods consumed, Q the level of envronmental qualty (Q 1 > Q 0 ), y s ncome. The superscrpts 0 represent the ntal (status quo) condtons,.e. muncpal sold waste (MSW) management domnated by the government. The superscrpts 1 represent the new condtons provded by prvate sector partcpaton n MSW management. Assumng that the utlty functon s contnuous and quas-concave, then the respondent s WTP can be expressed as a functon of the respondent s personal characterstcs: WTP () x where, x s a vector of the respondent s characterstcs, s a vector of parameters to be estmated, and s a random error. In ths study the WTP values were censored at zero,.e. all reported WTP values are larger or equal to zero. The formulaton of the tobt model s: y x (3) where, y s a latent (unobservable) varable for WTP, and ~ N 0,,.e. normally dstrbuted. The observed y counter part of y can be expressed as: y, f y 0 y y 0, f y 0 (4) The log lkelhood functon for the tobt model s: 1 ( y x ) x log L log( ) log log 1 (5) y 0 y 0 s the standard normal cumulatve dstrbuton functon. 3.1 Statstcal analyss The tobt model was estmated usng the LIMDEP NLOGIT verson statstcal package (see Table ). The varables n the model are descrbed n Table 1. The exstence of heteroscedastcty and non-normalty n the error term of the tobt model were tested usng the Lagrange multpler (LM). The null hypothess of homoscedascty s 0. The LM statstc was calculated as Ths s asymptotcally dstrbuted as ch-squared X wth 10 degrees of freedom. Gven that X (10) = 3.09, the hypothess that the model s

4 Journal of Sustanable Development Vol. 4, No. 4; August 011 homoscedastc can be rejected at 1% statstcal sgnfcant level. The test statstc for normalty was computed as wth degrees of freedom usng the LM test. Gven that X 0.01 () = 9.10, the hypothess that the error term s normally dstrbuted can be rejected at 1% statstcally sgnfcant level. These test results show that the assumptons requred to use the tobt model could not be satsfed. As an alternatve to the tobt model, the censored least absolute devatons (CLAD) estmator (Powell, 1984) was used. It s consstent and asymptotcally normal for a wde class of error dstrbutons wth heteroscedastcty of unknown form and a censored dependent varable. Ths estmator requres less assumpton to acheve consstency. For example, the contnuty condton s general and does not requre homoscedastcty. Wth ths n place the CLAD acheves consstent estmaton of parameters of nterest (Greene, 003). The prncples for consstency n the valuaton method used n ths study means that a pont estmate of the ndvdual respondent s maxmum wllngness to pay (WTP) amount was not determned. Instead, the respondent s true maxmum WTP les n the nterval between the respondent s reported WTP and the next hgher WTP amount on the payment lst (e.g f the respondent reported 50 Ngeran Nara (NGN), then the true WTP wll be 75NGN; f s/he reported 300NGN the true WTP wll be 35NGN). The respondents mean wllngness to pay for prvate sector sold waste servces MWTP was estmated as: n 1 B j B k MWTP (6) n 1 where, n s the sample sze and B j s the amount reported by the respondent and B k s the next hgher amount on the payment lst that was presented to the respondent. The net present value NPV of a stream of net benefts receved over a perod of n years was computed as: n B NPV B Bn (7) 1,..., 1 (1 r) where B 1 s the amount of net benefts receved the frst year, r s the dscount rate. In ths study we have used the dscount rate of 3%. Multcollnearty (.e. condton n whch two or more ndependent varables are correlated) s often a problem n ths type of study. The varance nflaton factor for each varable (see Table 1) was less than and the correlaton coeffcent between the varables were all less than 0.4,.e. multcollnearty was not a serous problem n the estmated model. The varables used n the statstcal analyss are presented n Table Results and dscusson The average household sze of the respondents was 5 persons, whle 57% of the respondents were male and 43% female (see Table 1). More than 86% of the respondents were wllng to pay for prvate sector sold waste servces. Of these 48.8% were male and 37.6% female. The results show that some Ilorn resdents have wllngness to pay for prvate sector sold waste servces and ths suggests that the present sold waste management n Ilorn has not been very effectve. About 14% of the respondents were not wllng to pay anythng at all for prvate waste servces, most of them were male (8.4%) and t was 5.36% for the female. Women n the study area often have the task of sweepng and collectng sold waste materals n ther households therefore f waste management servces are neffectve they are more lkely to be affected than men. Therefore, women prefer more effectve and effcent sold waste servces. The most mportant reason gven by the respondents who were not wllng to pay anythng at all was that they thought that waste management s the responsblty of government. Another mportant reason was that they rased doubt regardng the capacty of the prvate sector to manage sold waste servces effectvely. The respondents mean wllngness to pay (MWTP) was NGN /month (US$.55) ths amounts to NGN 4,676/year (US$ 30.56),.e. 1.05% of ther household s ncome per year. Snce the human populaton n Ilorn s 766,000 (Natonal Populaton Commsson, 006), the number of households there should be 153,00. Aggregatng the MWTP amount over the relevant households of 153,00, the total perceved welfare beneft for the prvate sector sold waste servces to Ilorn resdents s estmated to be NGN 716,363,00 (US$ 4,68,11) each year. Assumng a 10 year project lfe at 3% dscount rate the total net present value of the welfare beneft s NGN 6,11,474,54 (US$ 39,950,814). The results of homoscedastc and heteroscedastc tobt models, as well as censored least absolute devatons (CLAD) model estmates for the respondents wllngness to pay for prvate sector sold waste servces are reported n Table. The dependent varable was the respondents wllngness to pay for prvate sector servces (WTP). The dfferences n the coeffcent estmates across the varous estmators can be used as a sort of specfcaton check (Chay and Powell, 001). For the coeffcents assocated wth ncome, educaton and santary Publshed by Canadan Center of Scence and Educaton 41

5 Journal of Sustanable Development Vol. 4, No. 4; August 011 nspectors, as well as coeffcents assocated wth house type and occupaton, the dfferences between the maxmum lkelhood (tobt models) and sem-parametrc (CLAD) estmates suggest that non-normal errors are an mportant source of bas n the tobt estmator. It s clear from Table that the maxmum lkelhood estmates of WTP are extremely based when compared to the CLAD estmator. When we use the CLAD model as a benchmark, the results show that the heteroscedastcty model actually does better than the homoscedastc model. The results of the heteroscedastc model are a bt smlar to those of the homoscedastc model. The sgns are all consstent and most of the estmated coeffcents are farly close between the two models. Except for the santary nspector and household sze varables, the magntudes of the estmated coeffcents for the heteroscedastc are all greater than those obtaned from the homoscedastc model. The results presented n Table suggest that the assumpton of homoscedastc varance for the sample data used n ths analyss may not be very realstc. When compared the CLAD to the homoscedastc and heteroscedastc tobt models, the magntudes of the estmated coeffcents for the CLAD are generally smaller except for the house type, gender, martal status and age varables. The results of the homoscedastc and heteroscedastc tobt models, as well as CLAD model are presented n Table. The coeffcent assocated wth ncome has a postve and statstcally sgnfcant effect on the respondents WTP. Ths mples that respondents who have more money were more lkely to pay more for prvate sold waste management servces. People who have more money often have more capacty to consume foods that are packaged n quck to dspose contaners than people who have less money. For example, yoghurt n plastc cans, beef and fsh n tn cans, as well as bottled drnks. The more canned food and bottled drnks an ndvdual consumes the more the sold waste materals that wll be dscharged to the envronment s. Hence, people who consume more foods that are packaged n quck to dspose contaners are more lkely to be affected when sold waste servces are neffectve. To avod such stuaton these groups of people may be wllng to pay more money for an mprovement n sold waste servces. Ths suggests that areas where more people who have more money lve can be better served by prvate sector, because they possess more economc power and should value envronmental qualty more than people who have less money. Areas occuped by people who have less money can be better served by government agences because the people are less lkely to have enough economc power to pay for publc goods such as envronmental qualty. The ncome varable has the hghest statstcal sgnfcant effect n the homoscedastc model when compared to the heteroscedastc model and the CLAD. Ths shows that when heteroscedastcty and non-normalty s gnored n the tobt model the ncome effect on WTP wll be overestmated. The coeffcent assocated wth educaton has a postve and statstcally sgnfcant effect on the respondents WTP. Ths shows that the more the respondents schoolng years the hgher the WTP s. A reason may be that more educaton helps people to comprehend the news about future benefts of effectve and effcent sold waste servces e.g. mprovement n envronmental qualty and less tendency of envronmental polluton related alments. Ths ndcates that an ncrease n the awareness of the people regardng proper waste dsposal may lead to postve atttude towards envronmental cleanlness. The educaton varable has the least statstcal sgnfcant effect n the homoscedastc model when compared to the heteroscedastc model and the CLAD. Ths shows that the effect of educaton on WTP s underestmated when heteroscedastcty s gnored n the tobt model. The coeffcent assocated wth santary nspectors has a negatve and statstcally sgnfcant effect on the respondents wllngness to pay for prvate waste management servces (WTP). Ths reveals that the respondents who resde n areas where the actvtes of santary nspectors were strongly notced were less lkely to pay for prvate waste servces. Ths suggests that the use of santary nspectors can help to ncrease the effectveness of sold waste management. Increasng the number of santary nspectors wll attract more costs to the government, thus, t may be better to ncrease the actvtes of santary nspectors n areas where there s more envronmental problems. Snce ndvduals often mnmze costs, people who lve n areas where the actvtes of santary nspectors are strongly felt may not be wllng to pay more money for alternatve waste management servces because they may not expect more mprovement n envronmental qualty compared to what s obtaned at present. If people are satsfed wth the present sold waste servces they would have less value for alternatve waste management servces that would cost them more money. It seems that the santary nspectors n the study area have contrbuted to makng sold waste management more effectve but ther actvtes appear to be more concentrated n some areas. The santary nspector varable has hgher statstcal sgnfcant effect n the homoscedastc model when compared to the heteroscedastc model and the CLAD. Ths shows that the effect of santary nspector on WTP s overestmated when heteroscedastcty s gnored n the tobt model. The coeffcent assocated wth house type has a postve and statstcally sgnfcant effect on the respondents wllngness to pay for prvate waste servces (WTP). Ths shows that respondents who lve n a sngle-famly dwellng were more lkely to pay for prvate sold waste management servces. The occupants of a sngle-famly dwellng house often have more land area than the mult-user dwellng occupants. Some sngle-famly occupants n Ngera often cultvate hortcultural crops to beautful ther premses and some engage n gardenng. These actvtes tend to contrbute to generatng more sold waste materals (e.g. leaf fall and garden waste). Thus, occupants of the sngle-famly house are more lkely to be affected by neffectve sold waste management 4

6 Journal of Sustanable Development Vol. 4, No. 4; August 011 servces than mult-user dwellng occupants. For the case of mult-user dwellng the occupants are less lkely to have enough ncentves to pay for an mprovement n sold waste servces as they are aware that they can free-rde,.e. enjoy the benefts free of charge or pay less money. Hence, respondents who lve n sngle-famly house were more wllng to pay for prvate waste servces. The house type varable has least statstcal sgnfcant effect n the heteroscedastc model, whle the effects n the homoscedastc and CLAD models were smlar. Ths reveals that the effect of house type on WTP s overestmated when heteroscedastcty s gnored n the tobt model. The coeffcent assocated wth occupaton has a negatve and statstcally sgnfcant effect on the respondents WTP. Ths suggests that respondents who engaged n formal employment (.e. jobs that requre formal tranng) such as teachng, nursng and human resource managers were less lkely to pay for prvate sold waste servces. A reason may be that t s often employers who have the responsblty to see to the cleanlness of the work envronment n ther organsaton to avod beng penalsed by waste management board. Hence, people who engage n formal employment have less ncentve to pay for prvate waste servces as opposed to people who are engaged n nformal employment such as farmng and tradng. The occupaton varable has hgher statstcal sgnfcant effect n the heteroscedastc model compared to the homoscedastc model. Its effect on the CLAD was not sgnfcant. Ths shows that the effect of occupaton on WTP s overestmated when non-normalty of the error term s gnored n the tobt model. The coeffcents assocated wth tme taken to travel to the nearest dump ste, gender, martal status, age and household sze were not statstcally sgnfcant. However, t should be noted that the coeffcent assocated wth household sze has smlar sgns (negatve) for the homoscedastc and heteroscedastc models but postve for the CLAD. Ths shows that f non-normalty of error term s gnored t can lead to a msleadng results that may have negatve polcy mplcatons. 5. Concludng remarks The study reported n ths paper has been conducted n a rapdly growng cty n a developng country where sold waste management has been a major cause of concern. Although, varous agences have been establshed to manage muncpal sold waste n Ilorn, southwest Ngera they have not been very successful. In order to gear muncpal sold waste management toward sustanablty and effcency we have explored the nvolvement of prvate sector. To ths end the study has focused on the value that urban resdents held regardng prvate sector sold waste management servces. We have used contngent valuaton method to elct the value that people held for the prvate sector servces and ths often generate some zero wllngness to pay responses. To deal wth ths problem we have explored the use of a consstent and robust estmator to model the data. The results show that most of the respondents were wllng to pay for the prvate sold waste management servces. The effect of dfferent varables on wllngness to pay for the servces was estmated wth tobt and censored least absolute devatons (CLAD) models. The results from the statstcal analyss show that respondents who have more money, educaton and lve n a sngle-dwellng house were more wllng to pay for the servces, whle those who lve n areas where the actvtes of santary nspectors were strongly felt and engaged n formal employment were less wllng to pay for the servces. It also reveals that the tobt model s vulnerable to the exstence of heteroscedastcty and non-normal error. The results show that the CLAD estmator s robust under these condtons and can deal wth zero response data. In the applcaton reported here, the CLAD outperformed the tobt models, reducng the mplct restrctons nvolved n the tobt model. Regardng our applcaton, suffce s to say that the CLAD s a practcal and theoretcally promsng way of modellng zero wllngness to pay data. Although, prvate partcpaton n muncpal sold waste management s a promsng way to ncrease effcency the economc behavour whch governs prvate sector provson of sold waste servces may not yeld socally optmal outcomes because of the free-rder that s nherent n t. To acheve optmal socal outcomes, the nterventon of government s requred. Prvate sector should be encouraged to take over only some aspects of sold waste management. 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9 Journal of Sustanable Development Vol. 4, No. 4; August 011 Table. Determnants of wllngness to pay for prvate sold waste servces 46