Author(s)

Tran Thi Thu Trang^1*, Roberto F. Rañola², Nguyen Van Song¹

¹Department of Resources and Environmental Economics, Faculty of Economics and Rural Development, Vietnam National University of Agriculture, Hanoi, Vietnam.
²Department of Agricultural and Applied Economics, College of Economics and Management, University of the Philippines Los Baños, Los Baños, Philippines.

Despite the number of studies focusing on the financial analysis of production activities, conducting on technical solutions, and improving water quality, no study has been conducted on the application of economic instruments that apply to water quality management in craft villages, and several studies of WTP also. This study aimed to estimate the households’ willingness-to-pay for wastewater treatment in selected traditional agro-food processing villages in Nhue-Day River Basin, Vietnam. A pilot Choice Experiment (CE) technique in Choice Modelling (CM) approach was applied for this study with 267 selected agro-food processing households by using the conditional logit (CL) and random parameter logit (RPL) models. The results showed that total annual environmental fee for wastewater treatment from agro-food processing households is estimated as 1089 million VND (equal to US$47,868 per year) for the total of 902 agro-food processing households in three research sites in Nhue-Day River Basin. This estimated budget for wastewater treatment accounted for 55.85% of total annual operation and maintenance costs only. In addition, the technology is improved to enable 90% of treated wastewater. Overall, the results of this study suggest the new wastewater treatment plant construction and improved wastewater collection system by increasing the investment in order to improve the water quality in Nhue-Day River Basin that brings about the reducing environmental degradation, biodiversity loss and human health risks.

Wastewater Treatment, Willingness-to-Pay, Craft Villages, Choice Experiment, Conditional Logit Model, Random Parameter Logit Model

Trang, T. , Rañola, R. and Song, N. (2018) Households’ Willingness-to-Pay for Wastewater Treatment in Traditional Agro-Food Processing Villages, Nhue-Day River Basin, Vietnam: Case Study in Hanoi City. Journal of Environmental Protection, 9, 1021-1033. doi: 10.4236/jep.2018.910063.