Are Metro Manila Households Willing to Pay for Cleaner Public Transport?

Jamil Paolo Francisco

No rr2011011, EEPSEA Research Report from Economy and Environment Program for Southeast Asia (EEPSEA)

Abstract: To address the problem of air pollution in Metro Manila, the study proposes a jeepney buy-back program through which the current fleet of diesel jeepneys would be replaced with zero-emission electric vehicles. Households are made to pay for the program through a surcharge on top of their monthly electricity bill. A single-bound dichotomous choice contingent valuation approach using the referendum format is employed to estimate willingness to pay (WTP). The study arrives at WTP estimates for the program aimed at providing cleaner public transportation ranging from PHP 173.10 (USD 3.85) to PHP 259.75 (USD 5.77) per month. However, a simple cost-benefit comparison shows that the program remains economically unfeasible without government support, particularly due to the high cost associated with replacing the diesel fleet. Nonetheless, substantial aggregated benefits show that Metro Manila households are indeed willing to pay for improved air quality from cleaner public transport. Income, education and bid level are found to be significant determinants of WTP. The study also investigates the impact of using secret ballots for eliciting WTP responses to reduce yea-saying bias. Results show that the method of WTP elicitation influences WTP responses. WTP estimates from data gathered using the secret ballot technique were significantly lower than estimates from data gathered using the conventional face-to-face method.

Keywords: pollution; WTP; Philippines (search for similar items in EconPapers)
Date: 2011-01, Revised 2011-01
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