although some rural households try to take care of the collection and disposal of solid wastes generated by their own families, illegal roadside solid waste dumping in rural areas is very pervasive. Without adequate collection and disposal, it will cause wide spread diseases and environmental degradation (surface and ground water contamination, soil contamination and air pollution, etc.).

# 3.2 The Eryuan Project

In 2007, the Government of Yunnan Province requested World Bank to help finance its new urban environmental enhancement program, which intended to provide critical urban infrastructures and enhance the watershed environments of this less-developed inland southwest province of China. One of the program components is the municipal solid waste management improvement project in Eryuan County.

Eryuan is a small rural county in Yunnan Province. Its total population is under 300,000, most of whom (93%) belong to the rural population, with only 7% possessesing urban residential registration (Hukou) status. Eryuan is a relatively poor county. The per capita GDP in 2005 is only 4600 Yuan (560US$), significantly below that of Kunming city (17000 yuan, or 2075US$)<sup>11</sup> , the capital city of Yunnan Province. Located about 70 kilometers away from the famous tourist city, Dali, the capital city of Bai Autonomous Prefecture of Yunnan, Eryuan has a scenic geography and is an important component of Dali's tourist resource.

Figure 2 below indicates the project site in Eryuan County. The project is to build a new sanitary landfill facility, at the site indicated by the black square in Figure 1. With particular considerations given to the location choice and the necessary equipments, the new landfill infrastructure is expected to have no negative impacts on the health of the local residents and the local environment. This new project is also to expand the solid waste collection and disposal service from Cibixiang<sup>12</sup> , the capital town of Eryuan County, where a simple service in garbage collection and disposal has been available even though with a very low management quality, to cover three other small towns (Niujiexiang, Sanyingxiang and Fengyuxiang), the geographical locations of which are given by the dotted blue circles in Figure 1.

# **4. The Survey**

# 4.1 Survey Design and Implementation

In order to estimate the total willingness to pay of the households located in Eryuan for the improved SWM Project, a contingent valuation survey was designed and implemented in the summer of 2007 in the project area. A four stage stratified random sampling approach was used to select a sample of households. At stage 1, according to the distribution of project beneficiaries, a geographical boundary (i.e., towns) was determined so that the sample can cover all the geographical area of the project. At stage 2, the number of households in each town to be surveyed was calculated based on the ratio of sample size to the total number of households in the project area. At stage 3, each town is further divided into a number of communities or villages, and a list of communities is randomly selected to be surveyed, with

> 11 The official exchange rate at the end of 2005 : 1USD=8.19 Yuan.

> 12 Xiang is a constituency under county in China. In this paper, Xiang refers to a town where the Xiang government is located, which is bigger than a village but is smaller than a county town or a small city.

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