Estimating Willingness to Pay for Continued use of Single use Plastic Shopping Bags, Addis Ababa, Ethiopia
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Date
2020-06
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A.A.U
Abstract
Addis Ababa, the capital city of Ethiopia, is a diplomatic center for African union, United nation
and also regional head quarter for big organizations like, UNDP, UNICEF, and FAO etc. Hence
great focus must be given to the city in order to keep the attractiveness and wellbeing of the
environment. But now a day, plastic shopping bags which are used to carry goods from the
grocery and supermarkets are causing major problems. Their nature which is light weight, easy
to carry and freely provided at the point of purchase contributed to the mismanagement and
irresponsible disposal of these bags, which in turn caused plastics to be everywhere like in the
streets of Addis Ababa. Hence this adverse effect must be alleviated through either shifting to
using other environmentally friendly bags or proper management through intervention of
appropriate policies to manage plastic bag wastes. The study has attempted to investigate the
willingness to pay for plastic bag tax and the determinant of willingness to pay for the tax using
Contingent Valuation Method. Additionally, the study employed three econometric models. These
are Tobit Model, Probit Model and Bivariate Model. The mean willingness to pay for a tax on
single use plastic shopping bags was obtained using the three models. Furthermore, the study
found that tax rate on plastic bags to be highly elastic and for a higher tax on plastic bags
people tend to switch to other bags which have comparatively less price.
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Keywords
CVM, Probit, Tobit, Bivaraite