Economic Benefits of an Eco-Town for Slums in Dhaka City of Bangladesh: An Application of Discrete Choice Model

Md Hafiz Iqbal, Syed Rafiqul Hasan Milon

Abstract


Environmental changes in general, and those associated with climate change in particular, are increasingly recognized as growing drivers of establishing the slums. Climatic victims come to slums of major cities of Bangladesh for resettlement. They have less job opportunity and bound to lead substandard life under the surrounding urban environment. Urbanization, in general, is frequently blamed for greenhouse gas (GHG) emissions and hence for climate change. From the production perspective, if cities concentrate energy intensive production, this will push up their average GHG emission per person. In addition, unplanned waste management and sanitation of slum pollute environment in several ways. Greater congestion of slums has already leaded to severe health and security problems. As a result, poor slums dwellers suffer a lot, and their livelihood standard degrades as well. Eco-town based green growth plays an important role to get rid of these unexpected environmental hazards and improve the livelihood condition of slum dwellers. This study is conducted through questionnaire survey (n = 327) in the major slums of the Dhaka city and attempts to apply choice experiment approach to assess consumer attitudes, that is, the preference and willingness to pay (WTP) for establishment of attributes of solar photovoltaic (PV) system, improved sanitation, waste collection, waste based biogas plant for transmission of gas for households and monthly payment at different levels of eco-town for environmental changes and livelihood diversifications. Random parameter logit and multinomial logit models are used to quantify the slum dwellers perceptions on the attributes of eco-town. Attributes of solar PV system, improved sanitation, and waste collection, educational attainment, and age are found statistically significant and positive. The estimate of WTP on solar PV is higher than the WTP on other attributes in the study area. The findings in this study provide a robust basis for both policy makers and government to make more specified policies to make a low carbon society and eradicate poverty in the urban slums.

Aus. Aca. Busi & Eco. Rev Vol 3(2), April 2017, P 61-75


Keywords


Eco-town; Slum Dwellers; Choice Model; Marginal Willingness to Pay; Compensating Surplus

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