Journal of Environmental Management 327 (2023) 116805

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Journal of Environmental Management

journal homepage: www.elsevier.com/locate/jenvman

Research article

Assessing the preference and spatial dependence of a solid waste

management system in Nepal: A choice experiment approach☆
Mohammad Mashiur Rahman a, 1, *, Alok K. Bohara b
a
The W. A. Franke College of Business, Northern Arizona University, 101 E McConnell Dr, Flagstaff, AZ, 86011, USA
b
Department of Economics, The University of New Mexico, 1915 Roma Ave NE, Albuquerque, NM, 87131, USA

A R T I C L E I N F O A B S T R A C T

JEL classification: This study deploys a choice experiment method to estimate the preference and willingness to pay for a better
Q53 solid waste management system in Siddharthanagar municipality in Nepal. A primary survey of 611 households
Q51 was conducted, and the results from the Generalized Multinomial Logit Model (GMNL) indicate a public pref­
Keywords: erence for a better waste management service. Significant heterogeneity in household preferences is evident after
Solid waste management accommodating each choice selection’s preference certainty in the GMNL model. On average, households prefer
Choice experiment
to pay the highest amount for constructing and maintaining a sanitary landfill, which is Nepalese Rupee (NPR)
Willingness to pay
Generalized multinomial logit model (GMNL)
158/month (USD 1.43). The geographic distribution of the marginal willingness to pay (MWTP) by hot spot
Sanitary landfill analysis from the geocoded location also indicates spatial heterogeneity across the study area. The MWTP for
Spatial analysis each waste management attribute is spatially autocorrelated, and household awareness and attitude significantly
Nepal impact this spatial dependence. Overall, both the choice models result and spatial analyses indicate the policy
should be targeted at a localized level to increase awareness concerning the proper management of solid waste.

1. Introduction
In the face of accelerating population growth, especially in devel­
oping countries, an adequately administered solid waste management
system is imperative for raising environmental qualities, the standard of
living, and economic progress in urban cities. According to the United
Nations Habitat (UN Habitat, 2017), close to 54.0% of the global pop­
ulation live in urban cities, and urban growth is approximately 2.0% per
year. The rapid production of household waste, a by-product of popu­
lation growth, creates unfavorable conditions for society and the envi­
ronment. According to the World Bank, by 2025, 4.3 billion urban
residents will generate 1.42 kg of waste per day per capita (Hoornweg
and Bhada-Tata, 2012). Unauthorized disposal of waste in surroundings
as uncollected, a shortage of municipality’s waste management re­
sources, and a lack of knowledge of waste management practices
negatively impact the overall ecosystem, primarily through water and
air pollution. The landfill sites release a significant amount of methane
gas, which accounts for 10% of the total greenhouse gases (United States
Environmental Protection Agency, 2018) and significantly contributes
to global warming. Together with other global warming impacts
(Ackerman, 2000; Rahmasary et al., 2019), this negative spillover has
adverse human health effects (Patricia et al., 2013; Ndukwe et al., 2019;
Babs-Shomoye and Kabir, 2016). The collection, transportation, and
disposal of household waste in urban cities of developing countries
suffer from a lack of administrative planning and waste management
strategies (Guerrero et al., 2013). Municipalities also provide waste
management services at a lower capacity than the accepted standard.
Besides the under-provision of services, municipalities are often un­
aware of the preference and opinions of the households while devising a
waste management system. Hence, understanding household prefer­
ences can aid in developing solid waste management systems that best
serve the interests of urban populations.
Less than 50% of solid waste is collected in low-income countries, as
opposed to 98% in high-income countries (Hoornweg and Bhada-Tata,
2012). Nepal is a developing country facing an immense burden of
solid waste from its rising population and expanding economy. Ac­
cording to an Asian Development Bank (ADB) report, in 2013, Nepal’s
58 municipalities generated 524,000 tons of municipal solid waste.
More than 75% of the municipalities practice open dumping of waste. A
few municipalities use sanitary landfills but do not follow the standard

☆
Mohammad Mashiur Rahman reports financial support was provided by South Asian Network for Development and Environmental Economics (SANDEE).
* Corresponding author.
E-mail address: mohammad-mashiur.rahman@nau.edu (M.M. Rahman).
1
Mohammad Mashiur Rahman was a doctoral candidate at the department of Economics, University of New Mexico at the time of writing this manuscript.

https://doi.org/10.1016/j.jenvman.2022.116805
Received 24 May 2022; Received in revised form 1 November 2022; Accepted 14 November 2022
Available online 22 December 2022
0301-4797/© 2022 Elsevier Ltd. All rights reserved.
M.M. Rahman and A.K. Bohara
maintenance procedures. The waste management of Siddharthanagar
municipality and its neighboring regions in Western Nepal is an
alarming example of an improper system. This region’s population has
grown more than 21% in the last 17 years. As a gateway town next to the
World Heritage site of Lumbini (Birthplace of Buddha), the municipality
is experiencing rising tourism pressure, especially after constructing a
nearby international airport. The municipality operates its only landfill
site adjacent to the Danda River, which is filled far beyond its capacity.
The percentage of waste collected is significantly lower than in other
municipalities in the country.
According to the Nepal Solid Waste Management Rules (2013), the
local administration is responsible for discharging solid waste from
households. The rule under section 6 dictates that the municipality is
responsible for segregating organic, non-organic, and harmful or
chemical waste. Growing municipalities struggle to manage waste under
these rules due to the lack of institutional and financial resources. For
instance, the Siddharthahanagar Municipality had allocated only 5% of
the total municipal budget for waste management services (Asian
Development Bank, 2013), while effective waste management should
comprise 20%–50% of the municipal budget (World Bank, 2019). Other
than resources, the salient feature of developing a better waste man­
agement system for the local administration is the availability of infor­
mation on the household’s perspective and their willingness to pay for
improving different characteristics (recycling, composting, disposal,
etc.).
This study investigates the prospect of a waste management service
and willingness to pay using a choice experiment method on 611
households in Siddharthanagar. Additionally, the spatial distribution of
willingness to pay data is visualized over the geographic area and
identifies the factors driving that spatial variation. The primary survey
collects information on multiple aspects such as waste generation,
management, household preference, and willingness to pay. The choice
experiment (CE) method has been applied extensively in waste man­
agement to obtain the household’s preference for different attributes
(Othman, 2002; Jin et al., 2006; Menuka Karki, 2015). However, these
studies show the household’s willingness to pay (WTP) by averaging the
entire study area. Hence, they do not indicate any geographic distribu­
tion of attributes’ marginal willingness to pay (MWTP) over the study
area. Factors related to spatial variation of the WTP for each attribute
are also not identified in the literature. Although a few studies concen­
trated on multiple aspects of waste management in Nepal (Karki, M.,
2015; Rai et al., 2019a,b; Dangi et al., 2017), they mostly centered on
the capital, leaving little idea about other regions. This study uses a CE
survey to examine preferences and willingness to pay alongside a novel
spatial analysis for waste management in this region, which was absent
before. This survey collected household geolocations, which are used to
visualize spatial variations of each attribute MWTP by geographically
mapping the study area. Then, the Spatial Autoregressive Model (SAR) is
employed to explain the spatial variation of the MTWP at the individual
level. The SAR model uses attitudinal and demographic factors to exhibit
the shared economic environment that drives autocorrelation among
individuals. While other studies limit the analysis of waste management
to the average willingness to pay calculation (Tarfasa and Brouwer,
2018; Rai et al., 2019a,b; Karousakis and Birol, 2008); this study con­
tributes to the recent literature on waste management, public prefer­
ence, and urban policy by offering regional analysis from the spatial
variation of the data and providing a theoretical background of the
contributing factors impacting spatial variation, which have not been
studied previously.
The Generalized Multinomial Logit Model (GMNL) results indicate
that households exhibit significant heterogeneity and willingness to pay
for all the proposed waste management system attributes. For instance,
they prefer to move away from the open dumping practice, and their
MWPT (158 Nepalese Rupee (NPR)/month or 1.43 USD/month) is the
highest, on average, for constructing and maintaining a sanitary landfill.
Households also reveal a significant preference for improving recycling,
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Journal of Environmental Management 327 (2023) 116805
composting, and an increase in the amount of waste collection. Using the
stated level of preference certainty in the choice analysis produces
precise estimates for MWTP. Moran’s I and the subsequent hot spot
analysis on the individual-specific MWTP reveal spatial heterogeneity
across households. Finally, the SAR model results indicate that attitude
and awareness toward solid waste management are critical factors in
raising awareness about waste management and encouraging house­
holds to participate in the proposed system.
2. Literature review
Investigating public preference for environmental management in­
volves two methods in literature: stated preference (SP) and revealed
preference (RP). The SP method is extensively used to elicit the prefer­
ence for different environmental management strategies (Johnston
et al., 2017), and the application to solid waste management services is
noteworthy. The choice experiment (CE) is preferred among different
variants of the SP method due to its extensive choice scenarios and
welfare measurement. Othman (2002) investigated public preferences
from 600 households for a solid waste management system in Seremban
Municipality, Malaysia, an earlier study on CE and waste management.
The results indicated that households are willing to pay a premium per
month for improvements in multiple attributes such as waste collection
frequency (MYR2.46/USD 0.65), waste disposal methods (MYR3.99/­
USD 1.06), and transportation mode (MYR 3.26/USD 0.87). Cleanliness
of the waste collection, location of purchasing prepaid bags, and dis­
tance to the waste disposal location were critical factors associated with
public preference in a study by Ying-Chu Chen (2019) on 600 house­
holds in Taiwan. The MWTP of the choice scenarios in this study ranged
from USD 0.04–0.07 per trash bag. Tarfasa and Brouwer (2018) used the
CE method and analyzed the data using the mixed logit model to derive
the willingness to pay. The authors derived a significant premium for
increasing waste collection frequency and separating recyclable waste.
A similar result is also found in the studies by Woretaw et al. (2017) and
Jin et al. (2006) regarding the preference for segregation and recycling.
Massarutto et al. (2019) in Italy found the mean willingness to pay for
separate waste collection is €77/per year per family. However, the use of
latent class analysis reveals the opposite direction of choices from
multiple groups, which leads to the discussion of adopting a more
complex set of policy instruments that target different groups of in­
dividuals with appropriately chosen incentive schemes. Sakata (2007)
estimates a welfare loss of 200 yen (USD 1.74) for households in
Kagoshima, Japan, from an increase in the types of waste separation and
an increase in the cost of recycling service of 53 yen (USD 0.46) for each
1% increase in recycling rates. In a study by Ku et al. (2009), residents
revealed two factors — cleanliness of the facilities and collection of
small items — in making a payment. While the calculation of MWTP in
these studies involves the marginal utility of attributes and income, the
theoretical background was based on Random Utility Model (RUM), and
the estimation procedure used a multinomial Logit Model, respectively,
conditional logit and mixed logit.
The application of CE method to elicit households’ preferences for
waste management in the context of Nepal is not adequate. Rai et al.
(2019a,b) conducted a CE survey on 420 households in Ilam Munici­
pality in Western Nepal. The result from the mixed logit model is used to
derive the implicit price for waste collection frequency for an additional
time per month (USD 0.44), distance to the waste collection center per
minute walk up to 7 min (USD 0.19), and for every 10% increase in
subsidy to waste bin (USD 0.038). The cleanliness of the street is another
significant factor found by the same author (Rai et al., 2019a,b) in
Nepal. Bhattarai (2015) also found the mean WTP is NRP 166 (USD
1.69) per household per month for a better waste management system in
Banepa Municipality, Nepal, by using a contingent valuation (CV)
method. One remarkable result is that 83 percent of respondents were
willing to pay for improved solid waste management. In addition,
Maskey and Singh (2017) used stratified random sampling on 401
M.M. Rahman and A.K. Bohara
households in Gorkha Municipality and derived willingness to pay an
average amount of NRP 73.38 (USD 0.72) per month. Factors that
significantly influence households’ WTP for better waste management
services are monthly household income, education of the household
head, environmental awareness, and waste collection service.
The preference for a waste disposal method and the pricing mecha­
nism is also frequently studied in the literature. A CE study by Kar­
ousakis and Birol (2008) estimated the preference for curbside recycling
in the city of London, UK. In the study, households indicated the will­
ingness to pay for the number of dry materials collected, compost
collection, textile frequency, and collection frequency. Karousakis and
Birol (2008) found that incentives in the form of a deposit-refund
scheme also increased households’ preference to use curbside recy­
cling. Bohara et al. (2007) studied the impact of pricing mechanisms on
households’ waste production. Households reduced garbage container
size in the presence of a quantity-based pricing scheme when curbside
recycling is offered. Caplan et al. (2002) established the equivalent
result for curbside recycling with a contingent ranking (CR) method. In a
study by Zhang et al. (2012), households preferred separating waste at
the source before disposal. More pointedly, if the choice to sort waste
inside the house by themselves is offered, they revealed preference for
that choice, as evident from a study by Czajkowski et al. (2014).
Households showed a positive willingness to pay for door-to-door waste
collection in Dhaka Cty, Bangladesh, using a contingent valuation (CV)
method by Afroz et al. (2009). Households aggregately valued
door-to-door waste collection by 7.6 million Taka (USD 0.1 million).
Attributes such as segregation, collection frequency, disposal technique,
and segregation are routinely used in designing a choice set experiment.
In this study, two underutilized but consequential attributes are
added to enrich the choice set design dimension: composting and per­
centage of waste collection. While Karousakis and Birol (2008) incor­
porated composting in the study on London, rarely have any studies
attempted to explore the role of composting using CE methods in a
developing country, which is a viable method to manage waste.
Including composting is vital for a country like Nepal, where organic
waste is a significant portion of total waste.
In SP surveys, households are asked to trade money for a hypothet­
ical good. The trade can generate hypothetical bias (Li and Mattsson,
1995); the difference between hypothetical and actual payment is an
overwhelming concern in CE studies (Ready et al., 2010; Lusk and
Schroeder, 2004). Moreover, the cognitive burden of choice selection
from long, complex, and multiple sets poses the issue of uncertainty in
the preference. In this case, the follow-up question can be used to
mitigate hypothetical bias (Ready et al., 2010). This question is a
ranking about the certainty of the choice selected and utilizes the rela­
tionship between hypothetical bias and preference uncertainty. To
calibrate the CE data with stated certainty, Lundhede et al. (2009)
applied multiple approaches, including recoding the stated choice
(Kosenius, 2009) and modeling uncertainty in the scale variation across
responses. While the recoding approach created ambiguity in the con­
fidence interval of welfare estimates in the result of Lundhede et al.
(2009), explicitly modeling the stated certainty in scale variation
reduced the unexplained variance of uncertainty and offered a pur­
poseful method to account for hypothetical bias. While the impact of the
recoding approach depends on the choice of the calibration method, the
scaling approach provided more robustness (Hensher et al., 2012) in
dealing with uncertainty.
A notable portion of CE studies limits the analysis of MWTP calcu­
lation at the average for the waste management services, as opposed to
the individual level. Hence, previous studies barely attempted to iden­
tify the inherent spatial pattern of MWTP of multiple attributes for waste
management by exploiting individual-level welfare estimates. Although
the detection of spatial heterogeneity in MWTP of waste management
attributes is sparse in the literature, the application of spatial analysis in
CE studies in other fields is considerable. The distance-decay effect is
frequently used in evaluating a natural resource by an aggregate analysis
3
Journal of Environmental Management 327 (2023) 116805
of WTP (Bateman et al., 2006; Hanley et al., 2003). However, this
method is inappropriate where the distance from the respondent’s
location does not provide enough insight. The aggregation approach
also fails to explore the regional heterogeneity of MWTP. To enrich the
spatial dimension of MWTP, Campbell et al. (2008) used Moran’s I to
determine the spatial dependence of individual-specific WTP for land­
scape improvement at different spatial extents. Subsequently, the use of
hot-spot analysis by Getis-Ord Gi* (Johnston et al., 2011) and kriging
interpolation (Campbell et al., 2009) provides a concrete image of a
geographically diverse pattern of MWTP in ecosystem service valuation.
As an extension of the visualization of MWTP, spatial regression is used
to determine the impact of geographical and socio-demographic factors
on the individual-specific MWTP. For instance, Czajkowski et al. (2017)
used a separate Spatial Autoregressive (SAR) model for each forest
management attribute in order to identify the spatial determinants in
Poland. Similarly, the inquiry of Abildtrup et al. (2013) also revealed a
significant relationship between individual welfare estimates and access
to recreation sites under a spatial framework.
3. Materials and methods
This study uses primary survey data collected on 611 households in
Siddharthanagar municipality in June 2019. The standard survey pro­
cedure was followed before the final survey began. The first step was
training the enumerators by explaining each question and other survey
details that can arise in an interview. They were rigorously trained in the
CE section to suppress the cognitive burden associated with the
complexity of the choice sets for the respondents. Second, a focus group
discussion (FGD) was arranged with stakeholders from different areas,
such as solid waste management officials from the Siddharthanagar
Municipality, ward administrators, and a representative from a com­
munity engagement program related to waste management. A compre­
hensive review of the current and proposed management was presented,
which led to an engaging discussion and helped us identify the necessary
revision of the questionnaire. Third, a pre-test survey with 64 randomly
selected households was completed as a final survey trial. Finally, after
finalizing the issues in the pre-test survey, the questionnaire was revised
again to prepare for the final survey.
Siddharthanagar municipality has 13 administrative wards. Ward is
the smallest administrative unit in Nepal (Similar to the county in the
United States). For the sampling purpose, each of the wards was treated
as a stratum. The number of populations of each stratum was available
from the administration. This information allowed using the weighted
sampling technique (Valliant et al., 2013) based on the population to
determine the sample size from each stratum (See appendix for detailed
sampling design and selection method). Each respondent received a
consent script before beginning the survey, explaining background in­
formation and asking for permission to continue the interview. A Global
Positioning System (GPS) device also recorded the household’s
geographical (latitude and longitude) location.
The CE section collected 611 household responses from adults (≥18
years of age). Each respondent was presented with three choice sets and
three alternatives in each choice set. In each choice set, two are the
proposed alternatives (Solid Waste Management Program A and B), and
one is the current management program (Status-quo). In a choice set,
each alternative has five attributes with varying levels. The respondent
chose one alternative from each of the choice sets. Though 611 re­
sponses were recorded, 593 responses were used in the analysis. These
593 responses generate 1779 (593 × 3) observations (eighteen re­
sponses were dropped due to the missing values). Table 1 summarizes
the attributes with their different levels. The DoE.base function in R was
used to design the experiment, where the function constructs an
orthogonal array of choices from the full design. The orthogonal design
provided 72 choice sets. They were blocked into 12 versions with three
choice sets in each questionnaire (3 choice sets × two alternatives × 12
versions = 72 choice sets). Figure A1 in the appendix shows a GIS map of
M.M. Rahman and A.K. Bohara
Table 1
Attributes and their level used in the choice experiment.
Attributes Levels
Recycling Program § Yes
§ No*
Composting Program § Yes
§ No*
Type of Dumping § Sanitary Landfill
§ Open Dumping*
Percent of all waste collected § 28%*
§ 55%
§ 80%
Additional Monthly user fee § Rs 0*, Rs 10, Rs 50, Rs 80, Rs 100, Rs 150, Rs 250
Note: * denotes the level of the current management program.
the location of the households.
3.1. Attributes and their levels
This choice experiment uses five attributes: recycling program,
composting program, type of dumping, percent of waste collected, and
user fee. The selection of attributes is based on the recent literature,
current waste management practices in the municipality, debriefing,
FGD, and pilot survey. An example choice set (Table A2) is in appendix.
A brief definition of each attribute follows
1. Recycling program: The recycling program represents an overall
recycling scheme for household waste. All waste (biodegradable and
non-biodegradable) is currently buried in the ground. The munici­
pality does not facilitate any segregation of waste at the household
level. Under this system, the municipality will provide bins to
separate recyclables before collection and a drop-off point where
they can drop them. This attribute has two levels: ’Yes’ and ‘No.’ ‘No’
represents the unavailability of any recycling scheme in this mu­
nicipality, which is the status-quo level. The level “Yes” represents
the municipality’s starting of a recycling program. Previous studies
(Jin et al., 2006; Sakata, 2007) have also used this attribute.
2. Composting program: Bio-degradable wastes are generated mainly
from the food/kitchen. Composting is a way of turning kitchen waste
into organic manure, which is a fertilizer. This attribute represents
the availability of a composting program by the municipality. The
municipal authority could build a composting plant, train house­
holds on composting, and provide the necessary accessories. This
way, people can generate fertilizer from this procedure for their
agricultural activities. This attribute has two levels: ’Yes’ and ‘No.’
‘No’ represents the unavailability of any composting scheme in this
municipality under the current management program, which is the
status-quo level. The level “Yes” represents the availability of a
composting program by the municipality. Karousakis and Birol
(2008) found a significant WTP for collecting and composting food
and garden waste.
3. Type of dumping: The municipality practices open dumping
currently. This method buries the collected waste in a specific place
next to the river. Pek and Jamal (2011) used sanitary landfill and
controlled tipping as alternatives to open dumping. In this study, this
attribute represents Sanitary landfilling, which isolates the waste
from the environment until it is safe. The sanitary landfill will be
constructed outside of the city. This attribute has two levels: ‘Sani­
tary landfill’ and ‘Open Dumping.’ ‘Open Dumping’ is the current
management level.
4. Percent of all waste collected: Waste collection efficiency mea­
sures the share of waste collected by the municipality out of total
waste generated. The Siddharthanagar municipality collects only
4
Journal of Environmental Management 327 (2023) 116805
28% of the daily waste generated (Asian Development Bank, 2013),
the most recent figure for the percent of waste collection in Sid­
dharthanagar. Additionally, in the focus group discussion with mu­
nicipality personnel, the current rate found is closer to the rate
provided by the ADB. The rest of the waste is uncollected and scat­
tered throughout the city streets. The municipality can increase
waste collection efficiency by hiring more employees, purchasing
more collection vehicles, and providing more bins for waste disposal.
This attribute has three levels: 80%, 55%, and the current manage­
ment level of 28%.
5. Additional monthly user fee: This attribute describes the cost of
implementing a waste management program paid by the households.
This attribute is used to measure the MWTP for each of the above­
mentioned attributes (Louviere et al., 2000). Currently, the munici­
pality does not charge any monthly fee to run the management from
the households. Like other studies, this study does not use payment
mechanisms such as an addition to monthly utility bills or taxes
because of the feasibility issues in the study area. Implementation of
a tax program is futile due to institutional constraints. Similarly,
subsuming the extra charge for management into water or electricity
bills can create confusion among residents. Given these constraints,
local officials were consulted for a viable method, and a monthly user
fee to pay for the proposed waste management system was selected.
Payment levels are 250, 150, 100, 80, 50, 10, and 0 Nepali Rupees (1
USD = 110 NPR). The current payment is 0 rupees per month. Other
CE studies in this region also used this direct payment structure. For
instance, Kunwar et al. (2020) used a yearly direct payment system
for ecosystem attributes in Siddharthanagar. Rai et al. (2019a,b) also
used the monthly payment method to the municipality for the waste
management system in western Nepal.
4. The theoretical and empirical framework
4.1. Discrete choice models
Discrete choice models assume that households maximize utility
from the available alternatives. The conceptual framework of the choice
experiment under the Random Utility Model states that utility is derived
from each attribute of the good rather than the good itself (Lancaster,
1966). The respondent i is assumed to choose the alternative j over k (j,
k ∈ J) only if the obtained utility from alternative j is greater than
alternative k, or Uij > Uik . Uij follows the following form
( )
Uij = V Zij + ϵij (1)
The utility of respondent i is derived from the attributes represented
by the vector Zij . This study uses the Generalized Multinomial Logit
Model (GMNL) proposed by Fiebig et al. (2010) to estimate the CE
model, denoted by Equation (1). While GMNL is the most recent esti­
mation method for the choice data, the Conditional Logit (CL) model is
widely used as the baseline model. The transition from CL to the GMNL
model focuses on different levels of heterogeneity in choice selection.
The CL model treats parameters as constant across observations and fails
to capture the heterogeneity of preferences by individuals. To overcome
this limitation, the Random Parameter Model (RPL) model allows each
parameter to vary across populations randomly to capture the
observation-specific variations on the predicted probabilities for each
attribute (McFadden and Train, 2000). In addition to the RPL model’s
consideration for preference heterogeneity, a discussion about scale
heterogeneity in the choice selection exists in the literature (Louviere
et al., 2002; Louviere and Eagle, 2006; and Louviere et al., 2002). This
heterogeneity implies choice variation in terms of the scale of the idio­
syncratic error across individuals, which refers to the choice behavior
within alternatives being more random for some individuals than others.
One source of ‘scale’ heterogeneity in this study could arise from the
difficulty of choosing from different alternatives with varying levels of
M.M. Rahman and A.K. Bohara
attributes from three choice sets.
The GMNL model includes both preference and scale heterogeneity.
The vector of the individual-specific coefficient in the GMNL is given by
βi = σi β + {γ + σi (1 − γ)}ɳi (2)
The βi for the GMNL model depends on the constant vector β (CL
coefficients), the individual-specific scale of the idiosyncratic error σ i
(this parameter proportionally increases or decreases the constant β for
each individual i), a scalar parameter γ, and a random vector ɳi , which
captures the residual taste heterogeneity and follows a distribution of
∑
MVN (0, ). To constrain the scale parameter positive, it follows an
exponential transformation (Fiebig et al., 2010) with a standard devia­
tion τ and a mean σ
σ i = exp(σ + τVi) Vi ∼ N (0, 1) (3)
As τ increases, the degree of scale heterogeneity increases. Finally, it
is assumed that the heterogeneity at the individual level might arise
from the stated certainty level after each choice made from each choice
set. So, the scale parameter σ i also varies among individuals based on the
stated certainty level. This fact leads to the second GMNL model, which
is the GMNL with a stated certainty level and takes the form
( )
Uijt = β0j + ɳ0ij + [σ i β + {γ + σ i (1 − γ)}ɳi ]Xijt + ϵijt (4)
σ i = exp(σ + α1 × Certain High + α2 × Certain Low + τVi) (5)
In the scale parameter function in Equation (5), two levels of certainty
are added, high and low. Both are treated as binary variables. In the
utility function, (β0j +ɳ0ij ) is the vector of ASC and β0j is treated as a
random but unscaled parameter. Xijt is a vector containing all the waste
management attributes and treated as random except the price. The
coefficient on each attribute estimated by Equation (4) measures the
marginal utilities. These measure the welfare effect of a changed waste
management service. The marginal willingness to pay (MWTP) for an
attribute is obtained by dividing the coefficient of that attribute by the
cost attribute’s coefficient, followed by a negative sign (Louviere et al.,
2000). The GMNL models are estimated using the simulated maximum
likelihood method using 1000 random Halton draws with replications.
4.2. Spatial patterns of MWTP
The primary objective of this study is to measure the MWTP for each
attribute of the waste management system. However, this MWTP is
estimated at an average level and does not provide adequate insight into
the individual-level variation. Hence, the MWTP at the individual level
for each management attribute is estimated by applying the Bayesian
Theorem (Train, 2009; Greene, 2012).
The spatial patterns of individual-level MWTP are identified after
calculating the individual-level MWTP. The process begins by detecting
whether the individual-level MWTP exhibits spatial autocorrelation. The
autocorrelation is calculated by Moran’s I (Moran, 1950; Getis, 2008), a
broader index measuring the clustering tendency of each MWTP within
the spatial units. Then, the hot spot analysis is employed for each MWTP
to visualize the spatial patterns over the study area. The hot spot analysis
shows the spatial cluster of high or low values of each MWTP, and the
clustering context is neighboring high or low values. A hot spot is sta­
tistically significant if higher values surround it. The lower values of
MWTP conversely surround a cold spot for each attribute. The Getis –
Ord Gi* statistic is calculated (Johnston et al., 2011) to determine a hot
spot (cold spot) for each MWTP of management attributes. The Gi*
statistic produces a Z value and a corresponding P-value for each point,
which defines where MWTP’s cluster spatially with either high or low
values. The Getis – Ord Gi* statistic is calculated by Equation (6).
5
Journal of Environmental Management 327 (2023) 116805
n (
∑
n ∑ )
wij xj − wij X
* j=1
(
j=1
Gi = √̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅
)2̅ (6)
√n
√∑ 2 ∑ n
σˆx
√ wij − wij
j=1 j=1
n− 1
In Equation (6), wij denotes the spatial weight between observations i
and j, xj is the individual-specific value of MWTP of each management
attribute (X and ̂ σ x represent mean and the standard deviation), and n is
the total number of observations. The values Gi* produce is distributed
as Z-scores. A cluster of statistically significant larger (smaller) Z-scores
shows spatial dependence among MWTP values, which creates a hot
spot (cold spot). There are several ways to define a spatial weight be­
tween observations. This study uses a spatial weight matrix, W, to define
the spatial weight based on k = 8 nearest neighbors and a distance band
of 1500 m. Nelson and Boots (2008) showed that at least eight adjacent
neighbors are needed to achieve the normality of Gi*. Finally, the
kriging interpolation method (Campbell et al., 2009) is adopted to
project the vector of Gi* (as discrete spots are created) into a smooth
surface. The kriging method was used because of its ability to take into
account the geospatial correlation while carrying out the interpolation
and smoothing.
4.3. Spatial autoregressive model (SAR)
While Moran’s I provide a broader measure of the spatial depen­
dence, the spatial autoregressive model (SAR) (Anselin and Bera, 1998)
is employed to study the impact of respondents’ awareness and attitude
on the spatial variation of the MWTP. Under the SAR model, each MWTP
is assumed to be of the following form
(7)
′ ′ ′
MWTPij = τ + ρj W MWTPij + λ Kij + β X + ϵi
Where j = Recycling, Composting, Dumping, Waste collection at 55%,
and Waste collection at 80%. In this specification, τ is the constant, β is a
vector of parameters to be estimated, ϵ is the error term, and X is a vector
of socio-demographic information. A spatial lag term is also added to
account for the possible spatial autocorrelation within observations. W
is the weight matrix, and ρ is a scalar parameter that determines the
magnitude of spatial autocorrelation. The ρW measures the amount that
the MWTP of each attribute at a point is affected by the nearby MWTP
values that the covariates in X would predict. The presence of the term
W MWTPij in the right side of Equation (7) induces a nonzero correlation
′
with the error term irrespective of the error structure (Anselin and Bera,
1998). The spatial lag is not only correlated with the error term i but also
with the error term of all other locations. With this specification,
W MWTPj contains the ϵi and all the element ϵj , i ∕= j. Consequently, the
′
following condition holds for Equation (7)
[( ′ ) ]
E W MWTPj i ϵi ∕ =0 (8)
This condition allows the spatial dynamics in Equation (7), and the
resulting covariance structure of the spatial process exhibits a correla­
tion of each unit to all other units. However, when this lagged term is
ignored in the spatial data generation process context, the specification
error is omitted variable type. As a result, Equation (7) without lagged
terms will generate biased and inconsistent estimates. The spatial
modeling from Czajkowski et al. (2017) is followed in this study; how­
ever, respondents’ awareness and attitude to explain the spatial distri­
bution are used instead of geographical variables, which fulfills the
study objective better.
From discrete choice model estimation to SAR analysis, the entire
method used in this study includes several steps. For convenience, a
graphical diagram below (Fig. 1) lists the steps of the estimation method
M.M. Rahman and A.K. Bohara Journal of Environmental Management 327 (2023) 116805

Table 2
Descriptive statistics of the variables.
Variables Definition Mean S.D.

ASC = 1 if the alternative is status-quo, 0.33

0 otherwise
Recycling = 1 if Yes (0 = No). ‘No’ is the level for the 0.33 0.48
current management program. The level
’Yes’ denotes the starting of a recycling
program by the municipality and is
estimated relative to the current
management program ‘No.’
Composting = 1 if Yes (0 = No). ‘No’ is the level for the 0.33 0.47
current management program. The level
’Yes’ denotes the starting of a composting
program by the municipality and is
estimated relative to the current
management program ‘No.’
Dumping = 1 if “Sanitary landfill” and = 0 if “Open 0.31 0.46
Dumping”. ‘Open Dumping’ is the level for
the current management program. The level
‘Sanitary Landfill’ denotes the starting of a
sanitary landfill by the municipality and is
estimated relative to the current
management program ‘Open Dumping.’
Waste Collected = 1 if the waste collection is 80%. This is 0.22 0.51
Fig. 1. A graphical diagram of the steps of estimation. 80 estimated to the current level of 28%
collection.
Waste Collected = 1 if the waste collection is 55%. This is 0.22 0.41
5. Results 55 estimated to the current level of 28%
collection.
5.1. Discrete choice model estimates Price Monthly fee (NRs) for the proposed solid 72.03 81.03
waste management service A or B.
The current fee is 0 Rs.
The respondents predominantly prefer the proposed waste manage­ Certain - High = 1 if the certainty level of the respondent is 0.57
ment system, as indicated by the percentage of the chosen alternatives in high regarding the choice they made after
Table A3. Only 17.7 percent of households choose the current man­ each choice sets, 0 otherwise
agement program (status-quo), whereas alternatives A and B compose Certain - Low = 1 if the certainty level of the respondent is 0.2
low regarding the choice they made after
82.3 percent. Table 2 shows the descriptive statistics of the variables
each choice sets, 0 otherwise
used in the analysis. ASC measures the effect of choosing current man­ Recycling = 1 if the respondent heard about any 0.37
agement and is set equal to one. The management attributes, such as Awareness recycling campaign in the community,
recycling, composting, landfilling, and waste collection at 55% and 0 otherwise
80%, are dummy variables where the proposed level equals one, and the Composting = 1 if the respondent heard about any 0.56
Awareness composting campaign in the community,
status-quo level is 0. The waste collection at 80% and 55% is equal to 0 otherwise
one against the current management level (=0), 28%. Price is the Sanitary landfill = 1 if the respondent is very supportive 0.05
monthly user fee treated as a continuous variable for the proposed support towards a sanitary landfill from the current
management A and B, with a mean of 72.03 in NPR. open landfill, 0 otherwise
Efficiency = 1 if the respondent is very supportive of 0.05
GMNL model analyzes the choice data, and the result is presented in
support increasing the waste collection level from
Table 3. Column 1 shows the GMNL 1 results, which do not incorporate 28%, 0 otherwise
the stated certainty in the scale heterogeneity function, whereas column Recycling = 1 if the respondents receive information 0.04
2 (GMNL 2) includes. The price attribute is negative and highly signif­ information about recycling form any public awareness
icant, and other variables’ coefficients and standard deviations are also program, 0 otherwise
Male = 1 if the respondent is male, 0 otherwise 0.58
consistent in their signs and significance across the models. As indicated Household No. Of household members 6.3 3.18
earlier, The RPL model performs better in accounting for preference Member
heterogeneity; however, this model fails to account for the scale het­ Brahmin = 1 if the respondent’s caste is brahmin, 0.1
erogeneity among respondents. The GMNL model captures the scale and 0 otherwise
Age Age of the respondent 39.06 14.73
preference heterogeneity. The scale parameter (τ) is positive and sig­
High - Education = 1, if the respondent has the education 0.11
nificant in columns 1 and 2, where column 2 incorporates the stated attainment level, is a bachelor or more,
certainty level after the choice selection. This result proves that re­ 0 otherwise
spondents do not uniformly display heterogeneity in choice selection. High-income = 1 if the respondents have an income level 0.27
While the scalar parameter (γ) is insignificant in column 1, significance of more than 20,000 (NPR), 0 otherwise
Observations 1779
is achieved after integrating certainty in column 2. According to Fiebig.
et al. (2010), γ should range between 0 and 1, as the estimate of γ follows
in this study. Moreover, the standard deviation of ɳi is proportional to = highly uncertain, 2 = moderately uncertain, 3 = Neutral, 4 =
the scale parameter (τ), as evident from the significance of both pa­ Moderately Certain, and 5 = Highly certain. There was no response in
rameters in column 2. The stated certainty level after each choice se­ categories 1 and 2 in the data, meaning the households are either certain
lection is used in column 2. The respondents were asked to rank the level or neutral. Hence, two certainty levels in the analysis are employed. The
of certainty after choice selection in each set on a scale of 1–5, where 1 base category is “Neutral.” Certain_High is a dummy variable set equal to

6
M.M. Rahman and A.K. Bohara Journal of Environmental Management 327 (2023) 116805

Table 3 landfill in Malaysia. Households rank the premium on the percentage of

Results of different models in choice selection. waste collection to 80% as the second highest, on average NPR 87/
Variables GMNL 1 GMNL 2 month (USD 0.79). The consistency between the payment amount and
percentage of waste collection by the municipality is noticed. House­
(W/O Certainty) (With Certainty)
ASC − 11.979*** − 15.077*** holds prefer to pay, on average, NPR 58/month (USD 0.51) to increase
(3.2) (3.777) the percentage of waste collection to 55%, while the payment is higher
Price − .086*** − .072*** for 80%. This result is similar to previous studies where households are
(0.205) (0.02) willing to pay to increase the waste collection frequency (Othman,
Recycle 0.819 0.930*
(0.664) (0.55)
2002).
Composting 1.604*** 1.491*** Regarding the recycling program, households do not seem to place a
(0.588) (0.449) high value and have the lowest WTP with NRP 13/month (USD 0.11).
Dumping 13.686*** 11.440*** The portion of recyclable waste in the total waste can explain this weak
(3.894) (3.04)
preference for recycling. A significant amount of total waste generated
Wastecollected55 4.559*** 4.193***
(1.607) (1.356) in Nepal is organic, which is evident from the national data (Asian
Wastecollected80 6.608*** 6.136*** Development Bank, 2013). This survey also finds that close to 60% of
(2.051) (1.657) household waste is organic. This fact leads to a higher WTP value for a
sd. ASC 16.387*** 20.301*** composting program, which is NRP 20/month (USD 0.18). All these
(3.781) (4.433)
sd. Recycle 4.967*** 4.371***
MWTP estimates are within the range of the cost that was offered to the
(1.471) (1.301) respondents.
sd. Composting 1.610* 1.718***
(0.901) (0.573) 5.2. Spatial pattern of MWTP estimates
sd. Dumping 9.253*** 7.896***
(2.546) (2.098)
sd. Wastecollected55 2.993*** 2.190*** The Spatial pattern of the MWTP estimates visualized by hot spot
(1.14) (0.675) analysis requires the calculation of the individual-specific welfare esti­
sd. Wastecollected80 4.255*** 4.525*** mates for each attribute. The results of Moran’s I statistic are presented
(1.525) (1.179)
in Table A4 in the appendix, which reveals the existence of significant
tau 1.525*** 1.702***
(0.165) (0.139)
spatial autocorrelation for all the attributes except composting, evident
gamma 0.058 0.080* from the P-value. While Moran’s I only measure the spatial relationships
(0.038) (0.047) within spatial units at a global scale, the analysis is extended to a hot
Certain-High 0.595*** spot analysis to identify the local clusters calculated by the Getis-Ord Gi*
(0.225)
statistic (Equation (6)).
Certain-Low 0.960***
(0.242) The generated values of Gi* follow a Z distribution, and the range of
N 1779 1779 Z values determines whether an individual spot is hot or cold. In a
AIC 2284.077 2278.221 distributional measurement, the Z score of − 1.65 to 1.65 is considered a
Log Likelihood − 1127 − 1122.1 statistically insignificant result. The range of 1.65 < Z < 1.96, 1.96 < Z
Note: ***p < 0.01, **p < 0.05, *p < 0.1. Denote the significance level. Standard < 2.58, and 2.58 < Z follows statistical significance with p < 0.10, p <
errors are in parenthesis. 0.05, and p < 0.01, and all indicate a hot spot. Conversely, these similar
Columns 1 and 2 represent the results of GMNL 1 and GMNL 2, respectively. For ranges in the negative interval follow the same statistical significance
these two models, the standard deviation is presented at the bottom panel as and indicate a cold spot. These scores are a vector of discrete values and
they are treated randomly. Column 1 does not account for the level of certainty, do not discern a clear pattern over the surface. The kriging interpolation
whereas column 2 accounts for it. Tau and gamma are two heterogeneity pa­
method can visualize these discrete spots by smoothing on a surface by
rameters given by Equation (4). Certainty_High and Certainty_Low are two binary
predicting a surface map.
variables to capture the stated level of certainty.
The results of kriging interpolation are presented in Figs. 3–7, where
the hot spot map for each attribute is presented in Figures A2-A6 in the
one if the respondent is highly certain about the choice sets’ selection.
appendix. The red dot indicates a hot spot in the hot spot maps, while the
Similarly, Certain_Low is also a dummy variable set equal to one if the
blue dot indicates a cold spot. The statistical significance increases
respondent is moderately certain. Both the variables are significant and
(decreases) based on the points’ darker (lighter) color. The statistically
positive, explaining the variation of the scale parameter in Equation (4).
insignificant dots are white. Similarly, in the kriging maps, the red color
The attributes 95% confidence interval of the estimates from the GMNL
indicates a pattern of hot spots of high clustered values of MWTP, while
models is presented in Fig. 2. For sensitivity analysis, the baseline CL and
the blue color indicates a pattern of cold spots of low clustered values.
RPL models are also estimated, and the results were similar to GMNL
The color gets darker or lighter depending on the range of the Z scores.
models in terms of sign and significance. The Akaike Information
The maps show the presence of spatial heterogeneity for most attributes,
Criteria (AIC) is used as a benchmark for the model’s statistical quality,
indicating that the MWTP varies across samples and geographical
which is listed in both columns of Table 3. The GMNL model, with stated
locations.
certainty, has the lowest AIC score among the two models and qualifies
A closer inspection of the data reveals the reason behind the hot spot
it as the best model. The rest of the analysis uses the estimates from the
zone, especially for ward number 11, that this ward does not have any
GMNL model with certainty to derive the welfare estimates for each
access to the current pick-up service provided by the municipality. This
attribute presented in Table 4.
fact is verified and displayed in Fig. 8a (left panel). Due to the munici­
This study’s primary objective is to derive the willingness to pay for
pality’s unavailability of waste collection services in this ward, they
each attribute of the waste management system. The significant and
perform an unauthorized method of waste disposal. In the Right Panel of
negative MWTP for ASC (Table 4) refers to households’ disutility while
Fig. 8b, the households of ward 11 have the highest percentage of
paying for the current management system. Households significantly
dumping waste in the yard and burning/burying the waste. The
value each attribute. On average, they prefer to pay the highest amount
improper behavior of waste disposal can be justified by the inability to
for constructing and maintaining a sanitary landfill, which is NPR 158/
access the municipality service. The clustering of high WTP values for
month (USD 1.43). This result is consistent with Othman et al.’s (2002)
most of the attributes at ward 11 is explained by the absence of mu­
findings that the residents strongly prefer implementing a sanitary
nicipality service and improper behavior. Similarly, a portion of ward 10

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M.M. Rahman and A.K. Bohara Journal of Environmental Management 327 (2023) 116805

Fig. 2. 95% confidence interval of the estimates of attributes from the GMNL models. Note: The broken red line indicates zero. The midpoint at the error-bar
indicates the estimates. The red dot indicates the estimates from GMNL 2 model, whereas the green dot indicates the GMNL 1 estimates. The GMNL 2 models
incorporate the stated level of certainty, whereas GMNL 1 does not. (For interpretation of the references to color in this figure legend, the reader is referred to the
Web version of this article.)

exhibits the hot spot zone. Both the panels in Fig. 8 show a similar to model the data. Moran’s I is significant for all the attributes except for
pattern of restricted service and illicit behavior at ward 10, explaining composting. Hence, the SAR model for all the attributes except com­
the hot spot zone. posting is estimated. Table 5 shows the SAR model results for all 4 at­
tributes MWTP and OLS estimates for composing. A specific variable
that can be adhered to each MWTP attribute is used with demographic
5.3. Spatial autoregressive model of MWTP estimates
factors, explaining the awareness and attitude towards a solid waste
management system. The results indicate that the awareness and atti­
Before estimating the SAR models, the OLS regression on each MTWP
tude that are directly related to the attribute positively and significantly
at the individual level is estimated. Then, Moran’s I on the residuals of
explain each attribute’s variation and spatial autocorrelation in MWTP.
OLS results is estimated to determine the necessity of using SAR models
However, attitude and awareness factors that are not directly related to
the attribute exhibit a no-association (even an opposite relation) with
Table 4
the MWTP. The autoregressive parameter is significant for all attributes
Marginal willing to pay (MWTP) for each attribute and their CI.
indicating a positive autocorrelation of MWTP over the geographic
Attributes MWTP 95% Confidence Interval (delta Method) surface. The socio-demographic characteristics are insignificant and do
Lower limit Upper Limit not suggest any potential impact on the variation of the MWTP. The AIC
ASC*** − 208.04 − 301.13 − 114.94 scores of the SAR models are lower than the AIC of OLS, which verifies
Recycle* 12.82 0.88 24.75
the appropriateness of the SAR model to fit the data best.
Composting*** 20.57 13.27 27.86
Dumping*** 157.86 139.98 175.73 In addition, Table A5 in the appendix has used all the support and
Wastecollected55*** 57.86 44.39 71.32 attitude variables in every regression. For instance, Composting Aware­
Wastecollected80*** 84.67 71.12 98.21 ness, Sanitary landfill support, and Efficiency Support are used in the
Note: ***p < 0.01, **p < 0.05, *p < 0.1. Denote the significance level. The lower recycling regression and similarly for other regressions. The result in­
dicates that using a specific variable for a specific regression achieves
limit is given by the Equation WTP
̂ k − Zα *se( WTP
̂ k ) and the upper limit is given
statistical quality better than using all the variables in a regression. The
2
by WTP
̂ k + Zα *se( WTP
̂ k ). All values are in Nepali Rupees per year (NPR./year). AIC score displayed in Table 5 is lower than the AIC score from the
2
regression with all variables of awareness and attitude for most of the
attributes in Table A5.

8
M.M. Rahman and A.K. Bohara Journal of Environmental Management 327 (2023) 116805

Fig. 3. Kriging interpolation of recycling.

99% confidence level are points with Z-scores > 2.58 or < -2.58 and p-value <0.01.
95% confidence level are points with Z-scores > 1.96 or < -1.96 and p-value <0.05.
90% confidence level are points with Z-scores > 1.65 or < -1.65 and p-value <0.10.
Note: Similar interpretation applies to the hot spot and kriging interpolation analysis of all the attributes below
Note: This figure shows the respondent households’ WTP hot and cold spots kriging interpolation for the recycling (Gi* z-scores, k=8 nearest neighbors, distance
band = 1500m)
Note: Hot spots are represented by the red-colored points, while cold spots are captured by the blue-colored points (figures in the appendix). In both cases, the areas
become progressively darker as the level of significance increases. The white dots are the statistically insignificant areas that displayed no spatial clustering of the
WTP value.

Fig. 4. Kriging interpolation of composting.

9
M.M. Rahman and A.K. Bohara Journal of Environmental Management 327 (2023) 116805

Fig. 5. Kriging interpolation of dumping.

Fig. 6. Kriging interpolation of waste collection (55%).

6. Discussion
A high percentage of proposed alternatives chosen by the households
in this study signals a solid preference to move away from the current
management. Studies in other parts of Nepal also found that a high
percentage of households are moving away from the current manage­
ment system of solid waste (Rai et al., 2019a,b; Bhattarai, 2015). This
descriptive result is strengthened when the empirical investigation
reveals the significantly negative ASC across all choice models. House­
holds strongly valued all other management attributes indicated by the
GMNL models. The price coefficient is negative, explaining the likeli­
hood of choosing an alternative decreases as the monthly payment in­
creases. The negative sign validates the economic relationship and the
structural foundation of a choice experiment method for valuation
purposes. The range of the MWTP magnitude of this study is similar to
the result found by Rai et al. (2019a,b), which ranges from USD

10
M.M. Rahman and A.K. Bohara Journal of Environmental Management 327 (2023) 116805

Fig. 7. Kriging interpolation of waste collection (80%).

a b
Fig. 8. (a) Door-to-door waste collection service provided by the municipality in each ward.
Note: The vertical axis shows the percentage of households in each ward who responded to the question of door-to-door collection service by the municipality.
(b) Mean of waste disposal by households in each ward.
Note: The vertical axis shows the percentage of households in each ward who responded to the question of dumping in the ward, riverside, and burning/burying
the waste.

0.038–0.44. The significant preference revealed in studies emphasizes to
the urge and necessity for better waste management across Nepal.
The MWTP estimates are derived from the GMNL 2 model, where the
stated certainty level is integrated into the scale parameter function.
This model fits the data best indicated by the lowest AIC score. The
significance of heterogeneity parameters (τ and γ) and two certainty
levels (Certain_High and Certain_Low) implies that households are
heterogenous in choice selection. Consecutively, the MWTP estimates of
this study also account for these heterogeneities and produce a robust
measure of household payment transfers. Moreover, the variation in
scale parameter has a relationship to some degree with a moderately
certain group than the highly certain group. The importance of certainty
level inclusion is evident from the significance of γ parameter. While this
parameter is not significant in column 1, it turns out to be significant
after accounting for the certainty level. Furthermore, each estimate’s
standard error is lower in the GMNL model with certainty than without
certainty. As a result, the precision of estimates increases due to the
narrower band of the confidence interval from the smaller standard
error, as shown in Fig. 2. Kunwar et al. (2020) also used the certainty
level in estimation and produced higher precision of coefficients in a
study for ecosystem services. This finding ensures the efficacy of using a
follow-up question such as certainty level to mitigate the hypothetical

11
M.M. Rahman and A.K. Bohara Journal of Environmental Management 327 (2023) 116805

Table 5
MWTP estimates for each attribute in a SAR framework.
Variables Recycling Compostinga Dumping Waste collected 55 Waste collected 80

Recycling Awareness 0.266** – – – –

(0.102)
Composting Awareness – 22.549*** – – –
(5.79)
Sanitary landfill support – – 5.46** – –
(2.47)
Efficiency support – – – 53.346** 11.726**
(19.675) (6.201)
Male 0.063 4.937 − 1.166 − 14.698 − 2.813
(0.102) (5.901) (2.462) (18.791) (6.178)
Household Members − 0.005 − 0.624 0.227 2.566 0.319
(0.015) (0.914) (0.381) (2.997) (0.958)
Age 0.003 0.175 − 0.106 − 0.796 − 0.335
(0.003) (0.197) (0.083) (0.647) (0.208)
High Income − 0.05 4.121 0.08 19.759 3.949
(0.112) (6.536) (2.716) (21.252) (6.817)
High Education 0.055 0.169 0.267 12.367 − 3.536
(0.162) (9.406) (3.928) (28.288) (9.859)
Rho 0.226** 0.228** 0.285*** 0.147a
(0.074) (0.074) (0.07) (0.08)
Intercept 1.1139*** − 43.754*** − 27.756*** − 205.877*** − 79.989***
(0.22) (10.778) (5.133) (40.279) (13.579)
N 532 532 532 532 532
AIC 1668.8 5977.3 5058.8 7240.5 6036.1
Log Likelihood − 825.39 − 2520.422 − 3611.248 − 3009.061

Note: ***p < 0.01, **p < 0.05, *p < 0.1. Denote the significance level. Standard errors are in parenthesis.
Columns 1,3,4 and 5 represent the results of the SAR model for each attribute: recycling, dumping, waste collection at 55%, and waste collection at 80%. Socio-
economic variables such as Male, Household Members, Age, High Income, and High Education are used in all the regressions. The awareness and attitude variables are
used in the following way: Recycling Awareness is used only at recycling regression, Composting Awareness is used only at composting regression, Sanitary landfill support
is only used in dumping regression, and Efficiency support is used for both the waste collected 55 and 80 regressions. Rho is the autoregressive parameter.
a
The Moran’s I on composting was not significant. So, the OLS estimate for composting in column 2 is presented.

bias (Ready et al., 2010) and enrich the statistical quality of the MWTP
estimates. Compared to the predominantly used mixed logit method in
discrete choice models, the GMNL approach allows more flexibility for
capturing the variation for each individual in the coefficients.
The inspection of geographical heterogeneity of MWTP’s includes
the global measure of autocorrelation, hot spot analysis, and kriging
interpolation. A significant global autocorrelation of all the MWTP’s
except composting is evident from the P-Value. The local clustering of
the MWTP’s depicted by hot spot and kriging smoothing analysis also
suggests a significant heterogeneity over space. There is little evidence
of any notable hot or cold spots for composting in Fig. 4, and this result is
in line with the insignificance of Moran’s I. For other attributes, hot
spots over the region are noticeable. For both the waste collection per­
centage at 55 and 80%, the hot spots are evident in Figs. 6–7. Ward
number 11 shows a higher WTP clustering indicated by hot zones for
both these attributes. The clustering of high WTP values for waste
collection at 55% is also observed in ward number 4, 9, and 10 at a
moderately significant level. The map in Fig. 5 shows a significant hot
zone at ward number 11 regarding the sanitary landfill. Fig. 3 indicates
that only ward number 8 has the clustering of high values of WTP for a
recycling program. On the other hand, cold spots are also visible in a few
areas across the attributes. Overall, each of the attributes MWTP shows a
considerable amount of spatial heterogeneity over the region. The
application of hot spot analysis to visualize spatial heterogeneity is also
evident in other areas of managements, such as forestry (Czajkowski
et al., 2017), river restoration (Kunwar et al., 2020), etc. The study by
Czajkowski et al. (2017) shows that households exhibit spatial clustering
regarding access to the nearby forest. Similarly, the spatial clustering
found in this study depicts that households with the least access to waste
management services have the highest willingness to pay, as depicted in
two panels of Fig. 8.
The spatial analysis in this study extends the understanding of the
factors that can explain spatial autocorrelation visualized by hot spot
analysis. Households live in a shared environment where their attitude,
awareness, and perspective are intertwined. This complex nature of
society builds up a common phenomenon that produces the spillover
effect from one household to another. This fact is utilized and explains
the exhibition of the shared economic environment that drives the
spatial autocorrelation of MTWP at the individual level. Previous studies
(Czajkowski et al., 2017; Abildtrup et al., 2013) have used spatial var­
iables such as distance to address the spatial characteristics of the data.
Using spatial variables has been demonstrated to produce better results
in these cases. However, due to the impertinence of spatial variables,
and the hypothesis of spillover effect in a complex shared environment,
this study has explored the prospect of the household’s awareness and
attitude as predictive factors. The distance to the landfill site could be
used in the dumping equation. However, using one spatial variable only
in one equation might lose the uniformity across these five equations.
Moreover, as the hypothesis concentrated on the impact of attitudinal
variables on spatial variation, any spatial variable was restrained in the
analysis. For instance, the hypothesis is set that awareness of one indi­
vidual about recycling and composting can positively influence other
individuals’ behavior; hence, they can explain the spillover effect of
MWTP. Due to the absence of any dumping or waste collection-related
campaign in the study area, household support is used as a predictive
factor for implementing a sanitary landfill and increasing the waste
collection from 28% to the proposed levels. Both these variables strongly
predict the variation of the MWTP’s. The autoregressive parameter (ρ) is
positive and significant in all attributes. The socio-economic variables
(Male, Household Members, Age, High Income, and High Education) are
used in all the regressions; however, they fail to explain any spatial
variation in MWTP’s. Chiefly, the SAR model has produced better results
(indicated by lower AIC) than the OLS estimation.
Regarding the reason for using a specific variable of awareness and
attitude in a specific regression, two sets of results are presented in
Table 5 and Table A5 in the appendix. Table 5 has five regressions with a
specific variable that can be adhered to the specific MWTP, whereas
Table A5 uses all the support and attitude variables in every regression.

12
M.M. Rahman and A.K. Bohara
The coefficient and significance level of these four variables (Recycling
Awareness, Composting Awareness, Sanitary landfill support, and Efficiency
Support) decrease at the use of all the variables in each regression
compared to using a specific variable. For instance, using these four
variables in the MWTP of dumping Equation turns the Sanitary landfill
support variable insignificant, with a drastic reduction of magnitude
from 5.46 to 1.43, compared to Table 5 results. Furthermore, the Effi­
ciency Support coefficient’s sign turns negative from positive with the
loss of significance and magnitude reduction from 11.72 to − 0.80. A
similar result is found for other equations. Hence, Table 5 indicates that
the MWTP of each attribute is directly and significantly related to the
awareness and attitude specific to that attribute. However, information
on awareness and attitude that is not directly related to (such as using
Recycling awareness in the Composting Regression or using Sanitary
Landfill Support in the waste collection regressions) the MWTP shows
the insignificance or even inverse results indicated in Table A5. The
magnitude of the autoregressive parameter decreases in Table A5, even
with insignificance for Wastecollection80 Equation. All this evidence
strongly supports the specifications used in Table 5. Nepal et al. (2007)
also found a similar pattern of results for forest conservation efforts and
social networks. Though estimated without accounting for any spatial
spillover, the study by Nepal et al. (2007) derived the same direction of
results regarding using the specific attitudinal variable for specific
purposes. However, using spatial models like this study allows the
additional benefit of understanding the inherent spillover in a shared
economic environment.
The preliminary results from this study indicate that households of
Siddharthanagar Municipality, Nepal, have a significant WTP and
preference heterogeneity to move away from the current management
system. The significance of both heterogeneity and certainty parameters
has fundamental implications for understanding the factors behind the
choice selection for management. The significance of the scale param­
eter implies that individuals vary in making a selection. This variation
could result from multiple factors, such as the complexity of choosing
from different alternatives, the perspective of necessity towards the
different proposed systems, the location of the individual, and access to
municipality-provided services.
Moreover, the significance of the certainty parameter reduces the
hypothetical bias in making selections. This finding indicates a higher
probability that households would trade money for the waste manage­
ment system if this were an actual transfer. The MWTP values for most of
the attributes exhibit positive spatial autocorrelation. The autocorrela­
tion implies a positive spillover of the transfer of payments from one
household to the neighboring households. The interconnection of the
households, the existence of similar households in a neighborhood, and
a sign of herd behavior (Banerjee, 1992) are the possible reasons for this
interconnected behavior.
The visualization by hot spot analysis indicates that households
exhibit spatial heterogeneity in MWTP for each attribute at a local scale.
Policymakers can set specific targets and formulates policy based on hot
or cold spots. For instance, the residents of ward number 11 show a
higher MWTP for waste collection at both levels but a lower MWTP for a
recycling program. Hence, this indicates the extent of charging a
heterogenous price by the municipality to extend the waste collection
service and recycling program in this area. Moreover, on a global scale,
awareness and attitude specific to the attributes are key factors in
describing the variation of each MWTP. This result solidifies that
households perform better in understanding the information and
participating in waste management from specific content. Using the
information on multiple attributes can create confusion and generate
opposite results.
The results provide a strong policy recommendation for the local
administration. The spatial autocorrelation of MWTP indicates that
ensuring the participation of households can create a dynamic effect
over the entire study area. The municipality can benefit from the spatial
maps in identifying the region with stronger preferences for specific
13
Journal of Environmental Management 327 (2023) 116805
attributes. The spatial model results ensure that the content of the
awareness programs or campaigns should focus on a specific attribute
rather than providing information on every aspect of solid waste man­
agement. These facts can guide the municipality in prioritizing the re­
gions for initiating waste disposal methods based on preferred attributes
and selecting information composition in awareness programs. Open
dumping has always been a viable solution for disposing of waste.
However, this requires a significant amount of a resource which is open
land. This requirement causes a significant economic burden on the
municipalities due to its scarcity and cost, propelled by population in­
crease. Households indicate a significant preference for recycling and
composting program. Their preference urges the necessity of a well-
engineered development of these programs in the municipality, which
can be used for a higher portion of waste disposal and reduce the
pressure on land.
7. Conclusion
This study investigates the prospect of a solid waste management
system for Siddharthanagar Municipality, Nepal, and the associated
spatial variation of management attributes MWTP’s. In general,
Households prefer the proposed management and are willing to pay for
all the attributes. On average, households have the highest willingness
to pay for constructing and maintaining a sanitary landfill, which is NPR
158/month (USD 1.43). The spatial variation is evident for the attributes
MWTP, and the spatial model results indicate that attitude and aware­
ness towards solid waste management are predictive factors explaining
the variation. By offering a regional analysis, this study contributes to
the recent literature on waste management non-market valuation by
providing a guideline to the municipality about the relative importance
of attributes over the geographic area. Additionally, factors identified in
the spatial model can benefit the awareness program, promoting
households to participate in the proposed system with a spillover effect.
While the general results from this study indicate the preference for
the proposed waste management system along with spatial heteroge­
neity and identify the factors explaining the MWTP, these findings
should still be taken with caution. Even though the maximum effort was
employed to select attributes through extensive literature review and
focus groups, choosing a subset used in the study may still have some
issues. There are several ways to elicit uncertainty measures. The use of
subjective probability about their certainty level – 1 (highly uncertain)
to 5 (highly certain) - regarding their selection of the choices may be
sensitive. Furthermore, a larger sample size would be more robust
against outliers and would enhance efficiency.
The problem of solid waste is rising at a faster rate in developing
countries. While the problem spills through numerous channels, health
impact is severe. The open dumping site that the Siddharthanagar Mu­
nicipality uses is alongside the Danda River. The leachate produced from
the decomposition of biodegradable waste seeps into the underground
drinking water source and the river water. Pollution in the water system
is a significant health concern. For instance, Nepal faces a soaring rate of
diarrhea-related morbidity incidences, and 5.9% of deaths in the coun­
try were attributed to diarrheal incidences in 2017 (Institute of Health
Metrics and Evaluation, 2017). Also, respiratory infections account for
5% of total deaths, which can be connected to improper dumping and
waste burning. An adequately designed waste management system can
significantly reduce this health hazard.
Besides health improvement, a rise in income is possible from a well-
structured waste management system. Nepal is a developing nation
where tourism contributes a significant portion of the country’s Gross
Domestic Product (GDP). According to the World Travel and Tourism
Council’s annual report in 2019, Nepal’s tourism sector contributed
7.9% to its GDP. This study area is the gateway of Lumbini, which
attracted over 1.55 million tourists in 2017. As evident by this research
results, a proper waste management system by the municipality with
support from residents can increase the environmental quality and
M.M. Rahman and A.K. Bohara Journal of Environmental Management 327 (2023) 116805

improve the municipality’s aesthetics. These improvements can help
attract more tourists; hence, there will be a beneficial impact on the
income level of the local population.
Author statement
Mohammad Mashiur Rahman, Ph.D.:Conceptualization, Method­
ology, Software, Formal analysis, Writing - Original Draft, Visualization,
Funding acquisition, Writing - Review & Editing, Data Curation, Re­
sources, Alok K. Bohara, Ph. D.:Project administration, Supervision,
Conceptualization, Methodology, Validation
Funding
The research leading to these results received funding from South
Asian Network for Development and Environmental Economics
(SANDEE) under Grant Agreement No. CONIS00932
interests or personal relationships that could have appeared to influence
the work reported in this paper.
Data availability
The data that has been used is confidential.
Acknowledgments
We are grateful to Nepal Study Center (NSC); Prateema- Neema
Memorial Foundation (PNMF); Prateema-Neema Health Institute
(PNMHI); and Lumbini Center for Sustainability (LCS) in Sid­
dharthangar, Nepal for serving as a host institution and assisting with
the logistics during the survey.
The research leading to these results received funding from South
Asian Network for Development and Environmental Economics
(SANDEE) under Grant Agreement No. CONIS00932.

Declaration of competing interest

The authors declare that they have no known competing financial

Appendix

Sampling design and selection method

The Siddharthanagar municipality is divided into 13 wards for administrative purposes. The number of households in each ward is available at the
municipality office. Each of these wards is treated as a stratum. These 13 strata comprise the population of the entire study area. However, the number
of households is not equal in each stratum. This is evident from column 2 of Table A1. Hence, this allowed using weighted or proportional sampling
techniques to find the number of households sampled from each stratum covering the entire population. As a result, the strata with a higher population
represent a higher sample, leading to a complete representation of the population in the sample. The information about the number of households has
enabled us to use the proportional sampling method. The final survey included 611 households from the municipality. For example, there are 18,763
households in the municipality, and 922 of them reside in ward number 2 (4.91% of the total households in the municipality). So, the number of
households to be sampled from ward 2:
922
× 611 = 30 Households
18, 763
The same technique was applied to calculate the sample for the other 12 wards. The number of households sampled from each ward is presented in
Table A1.

Table A1
Ward-wise sample selection

Ward Total HH per ward HH sampled per ward

1 2570 80
2 922 30
3 2170 68
4 1228 39
5 552 20
6 1375 47
7 625 21
8 2475 82
9 1736 60
10 636 18
11 769 27
12 2412 80
13 1293 39
Total 18,763 611
Source: Siddharthanagar Municipality, 2019

Table A2
Choice Set Example. Which solid waste management service do you prefer?
Note to the enumerator: Please show the table to the respondent while asking to choose the solid waste management package.
Below are three potential solid waste management programs to choose from: A, B, and current levels. All the three packets have the described attributes but at different
levels. Choose the solid waste management service packet you like the most. If none of the packets exactly matches your preferences, then chose the on you dislike at

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M.M. Rahman and A.K. Bohara Journal of Environmental Management 327 (2023) 116805

the least. While making your own choice, please consider your current income and expenditure because the fee mentioned on your chosen packet would need to be paid
in real life.

Attributes Solid Waste Management Solid Waste Management Current Solid Waste Management
Program A Program B Program

Recycling Program No Yes No

Composting Program No No No
Type of dumping Open Dumping Open Dumping Open Dumping
Percent of all Waste Collected 55% 80% 28%
Additional Monthly user fee 100 Rupees 150 Rupees 0 Rupees
Which solid waste management program do you prefer (Single answer only)? I choose program A I choose program B I choose current program
Put a tick mark in the box)

• How certain you are about your choice in the previous question?

1 = Very uncertain 2 = Somewhat uncertain 3 = Neither certain nor uncertain (neutral) 4 = Somewhat certain 5 = Very certain

Table A3
Percentage of chosen alternatives

Chosen Alternative Percent

Solid Waste Management Program A 42.44

Solid Waste Management Program B 39.85

Current Management Program 17.7

Observations 1779

Table A4
Moran’s I of MWTP’s

Attributes Moran’s Index Z Score P value

Recycling 0.09 5.43 0.00

Composting − 0.004 − 0.136 0.89
Dumping 0.1 5.87 0.00
Waste Collection 55 0.12 7.03 0.00
Waste Collection 80 0.06 4.06 0.004

Table A5
MWTP estimates for each attribute in a SAR framework

Variables Recycling Composting* Dumping Waste collected 55 Waste collected 80

Recycling Awareness 0.242* − 9.033 − 6.250* - 25.370 − 15.420*

(0.103) (6.024) (2.502) (19.448) (6.262)
Composting Awareness − 0.119 19.937*** - 0.940 - 24.337 9.418
(0.106) (6.156) (2.558) (20.323) (6.410)
Sanitary landfill support − 0.116 10.782 1.683 − 18.307 11.330
(0.160) (9.324) (3.867) (30.788) (9.681)
Efficiency support − 0.006 − 4.804 3.864 30.717 − 0.845
(0.162) (9.459) (3.922) (30.771) (9.819)
Male 0.061 3.793 − 1.592 − 15.893 − 3.605
(continued on next page)

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M.M. Rahman and A.K. Bohara Journal of Environmental Management 327 (2023) 116805

Table A5 (continued )
Variables Recycling Composting* Dumping Waste collected 55 Waste collected 80

(0.102) (5.925) (2.457) (19.472) (6.150)

Household Members − 0.004 − 0.627 0.204 2.606 0.344
(0.015) (0.915) (0.379) (2.991) (0.950)
Age 0.004 0.157 − 0.103 − 0.783 − 0.327
(0.003) (0.199) (0.082) (0.647) (0.207)
High Income − 0.047 3.914 − 0.075 12.299 3.071
(0.112) (6.531) (2.709) (21.744) (6.782)
High Education 0.045 1.040 0.444 13.115 − 3.034
(0.162) (9.413) (3.904) (33.289) (9.772)
Rho 0.192* 0.201* 0.263*** 0.099
(0.074) (0.075) (0.072) (0.081)
Intercept 1.292*** − 39.995*** − 26.744*** − 213.778*** − 83.724***
(0.232) (10.892) (5.378) (40.759 (14.259)
N 532 532 532 532 532
AIC 1671.4 5979.1 5057.1 7240.5 6031.425
Log Likelihood − 823.72 − 2516.564 − 3609.221 − 3003.712
Note: ***p < 0.01, **p < 0.05, * p < 0.1. Denote the significance level. Standard errors are in parenthesis.
Columns 1,3,4, and 5 represent the results of the SAR model for each attribute, respectively recycling, dumping, waste collection at 55%, and waste collection at 80%.
Socio-economic variables such as Male, Household Members, Age, High Income, and High Education are used in all the regressions. Rho is the autoregressive parameter.
*
Column 2 represents the OLS estimates for composting.

Fig. A1. Geographic location of the households .

Note: The dots in the figure indicate the location of the households by latitude and longitude. The river flows from the North to the south direction. The numbers in
red color indicate the ward numbers.

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M.M. Rahman and A.K. Bohara Journal of Environmental Management 327 (2023) 116805

Fig. A2. Hot spot analysis for recycling .

Note: This figure shows the respondent households’ WTP hot and cold spots for the recycling(Gi* z-scores, k=8 nearest neighbors, distance band = 1500m)
Note: Hot spots are represented by the red-colored points, while cold spots are captured by the blue-colored points. In both cases, the areas become progressively
darker as the level of significance increases. The white dots are the statistically insignificant areas that displayed no spatial clustering of the WTP value.
99% confidence level are points with Z-scores > 2.58 or < -2.58 and p-value <0.01.
95% confidence level are points with Z-scores > 1.96 or < -1.96 and p-value <0.05.
90% confidence level are points with Z-scores > 1.65 or < -1.65 and p-value <0.10.
Note: Similar interpretation applies to the hot spot analysis of all the attributes below

Fig. A3. Hot spot analysis for composting .

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M.M. Rahman and A.K. Bohara Journal of Environmental Management 327 (2023) 116805

Fig. A4. Hot spot analysis for dumping .

Fig. A5. Hot spot analysis for waste collected (55%)..

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M.M. Rahman and A.K. Bohara Journal of Environmental Management 327 (2023) 116805

Fig. A6. Hot spot analysis for waste collected (80%)..

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