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Willingness to Pay for Improved Sanitation in Indonesia: Cross-Sectional Difference-in-Differences

Yasin, Mohammad Zeqi and Shahab, Hasyim Ali and Nuryitmawan, Tegar Rismanuar and Arini, Hesti Retno Budi and Rumayya, Rumayya (2020): Willingness to Pay for Improved Sanitation in Indonesia: Cross-Sectional Difference-in-Differences.

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Abstract

In the face of insufficient attempt by policy makers to develop improved sanitation apparently has captivated attention of market-based approach– a potential solution of appropriate and safe sanitation for low-income settings. However, to accommodate this approach, a study to assess willingness to pay (WTP) of people upon sanitation is necessitated. This study aims to investigate the effect of individual’s knowledge upon the WTP of standardized latrine. This study employed primary data of 181 individuals spread in the three regencies and one municipality in the province of East Java, Indonesia. By using cross-sectional difference-in-differences, this study demonstrated a robust model revealing that the knowledge of individuals towards standardized latrine significantly brings positive impact on their WTP. This finding indicates that those who have known the standardized sanitation as well as its benefits tend to possess a higher WTP. Moreover, this study also discovered a significant effect of wife as decision marker in the family in allocating higher WTP to standardized latrine. This finding implies that women-led organizations (e.g. PKK or Muslimatan) can be an optimal media for socialization and marketing target of latrine products.

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