Comparative analysis of the Willingness to Pay (WTP) techniques: Predicting sanitation behaviors of users (landlords and tenants) by comparing WTP techniques for sanitation services in urban slums Dhaka, Bangladesh.

Period: June 2024 - ongoing

The proposed research, titled “Comparative Analysis of the Willingness to Pay (WTP) Techniques: Predicting Sanitation Behaviors of Users (Landlords and Tenants) by Comparing WTP Techniques for Sanitation Services in Urban Slums, Dhaka, Bangladesh”, seeks to address a critical gap in our understanding of user preferences and payment behaviors in the context of urban sanitation in low-income settings. Access to improved sanitation remains a persistent challenge in the densely populated urban slums of Dhaka, where infrastructural limitations, economic constraints, and complex landlord-tenant dynamics hinder sustainable service delivery. While previous studies have used various economic valuation techniques to estimate the willingness to pay for sanitation services, there is still limited evidence on how accurately these methods predict real-world behaviors and preferences, especially in complex and diverse urban slum settings.

This research aims to revisit and compare the effectiveness of three widely used WTP techniques—Discrete Choice Experiments (DCE), Contingent Valuation (CV), and Hedonic Pricing (HP)—in capturing and predicting the actual sanitation investment behaviors of two key user groups: landlords and tenants. Each of these techniques carries distinct strengths and limitations. For instance, CV methods are susceptible to hypothetical bias, DCE may oversimplify complex decision-making environments, and HP relies on the availability of adequate market data. By comparing the outcomes of these techniques within the same study context, this research will provide deeper insights into their relative predictive power and practical relevance.

To conduct this study, primary data will be collected in 2024 from five selected slum areas in Dhaka where earlier WTP data had been collected in 2019 under the Dhaka Sanitation Improvement Project (DSIP). This approach allows for a longitudinal comparison, capturing changes over time in users’ preferences, behaviors, and willingness to invest in sanitation services. The sample will include both tenants and landlords to account for the differences in decision-making authority, investment motivations, and access to sanitation services. Updated survey instruments will be used to reflect contextual changes, and statistical models—particularly mixed logit models—will be employed to analyze preferences and estimate WTP across different socio-economic segments.

In addition to comparing methodologies, the study will also explore the socio-cultural, economic, and behavioral factors that influence sanitation choices and financial commitments among urban poor households. Special attention will be given to tenure security, affordability, perceived benefits, and infrastructure availability. By identifying how these variables interact with WTP, the study aims to generate actionable insights that can inform the design of equitable and financially sustainable urban sanitation programs.

Ultimately, this research seeks to contribute to evidence-based policy and programming by recommending the most contextually appropriate WTP technique for predicting sanitation behavior in low-income urban settings. The findings will be relevant not only for Dhaka but also for other cities facing similar challenges, offering scalable lessons for improving access to safely managed sanitation and advancing progress toward Sustainable Development Goal (SDG) 6.

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The research is expected to generate several valuable outcomes that can inform both policy and practice:

  • It will establish a current baseline of the average WTP among slum dwellers, revealing how much landlords and tenants are willing to invest in sanitation services, especially sewer connections.
  • By comparing WTP data from 2019 to 2024, the study will track how economic shifts and changes in living conditions have influenced willingness to pay, providing insights into evolving user priorities.
  • The study will offer a comparative analysis of the three WTP methods (DCE, CV, HP), highlighting their strengths and limitations in predicting actual sanitation behaviors in low-income urban settings.
  • It will identify contextual factors—such as income, tenure security, and household composition—that affect WTP and influence sanitation decision-making.
  • The research will contribute evidence to support targeted and sustainable policy development, particularly focusing on the roles and responsibilities of landlords, who are key stakeholders in sanitation infrastructure in rental environments.
  • The findings will be applicable to similar urban contexts globally, offering scalable lessons and supporting progress toward Sustainable Development Goal (SDG) 6: ensuring access to water and sanitation for all.

By deepening our understanding of economic behaviors around sanitation, the study will help design practical, user-informed, and financially sustainable sanitation solutions for urban slums.

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