**Abstract**

Solid Waste Management is one of the importance environmental issues at many developing countries. There is a lack of studies on economic analysis of solid waste management in the many cities at the national and international level. Most of the Municipal Corporation or city management is the major responsibility for better waste management. However, the local governments has been allocated budget for solid waste management without analysing cost and benefit of solid waste. Although, waste management budget is focusing on collected waste but, uncollected waste has been creating a number of socio, economic and health issues. Therefore, this chapter has presents a details review on economics of solid waste management at the various developing and developed countries. The main policy implication of the paper is to emphasis on better understanding of economic importance of solid waste management to the local policy makers.

**Keywords:** economics, solid waste, cost, recycling

### **1. Introduction**

Solid waste is the byproducts of human activities such as production, consumption and distribution of various goods in the society. There are a number research has been investigated in the various aspects such as technology, innovation, recycling of solid waste management in the developing and developed countries. There are a lack of studies on economic analysis of solid waste management particularly in the developing countries, for example cost and revenue aspects [1, 2]. Most of the municipal corporation has not been maintained proper data on solid waste generation, collection, transportation and final disposal. Therefore economists are confused economic estimation of solid waste management [3]. Moreover, economic analysis of solid waste management is the most helpful to local policy makers on various aspects for instance, designing waste management tax/charges or subsidies at the municipal level [4]; cost and benefits of waste to energy [5] and determining of urban property through the better environmental amenities [6, 7]. There are various economics estimation of per ton of solid waste management in India, For example, National Institute of Urban Affairs [8] had estimated at Rs 135 for per ton of solid waste collection and disposal and another study by National Solid Waste Association [9] had calculated at Rs 417 per ton of solid waste management [3, 10]. Therefore, this chapter has discussed the economics of solid waste management and public policy at the municipal level in various developing and developed countries.

#### **2. Economics of solid waste management**

Harisch [11] was the first author who had made an important methodology contribution to study the methods of Solid Waste Management. Attention had then been shifted to the second generation of research, particularly to the work of Stevens [12] who had made substantial improvements in the Model of Hirsch [11] and those of Dubin and Navarro [13] whose papers had included some methodological innovations also. Don Fullerton and Thomas Kinnaman [14] and Beede and Bloom [15] had made generation reforms and had introduced new methods of making an econometric analysis of Solid Waste Management. Finally, a few Indian studies had made use of new methodological approaches and innovations which had used more of the statistical methods. So, more recent studies had been considered in greater detail in this section.

The First empirical study to use econometric analysis for determining, among other things, as to which form of service delivery (public or private) had an effect on the municipal cost, was that of Hirsch [11], who had studied a sample of 24 Municipalities in St. Louis country (Missouri). However, this study had used econometric model in terms of the explanatory variables were limited to the data that was an available in 1960s, the year for which he had collected the information. Therefore, the variables that were finally used to explain cost (the average costs per service) were the number of waste collection locations, the weekly collection frequency, whether the collection point was an alone or a collective agencies, the residential area, sources of finance and the form of service management, and the distinction between the municipal and the private delivery. The Article had concluded that there were significant differences in the service cost between the municipal and the private delivery. This study did not find any economies of scale with respect to the output in the service. Hardy and Greission [16] had analysed the possibility of saving costs through cooperative efforts in the collection and the disposal of the solid waste material. Heuristic algorithms had been used to determine the best locations for landfills and the best routes for the collection trucks to follow in the study area in five countries. They had discussed about the rural public service delivery problems, and had designed a method to determine the least cost solid waste management system for the selected areas. According to them the economies of scale to be realised in the disposal phase of a solid waste management system and the costs of collection were dependent on the population density and the size of the service area. The combined collection and disposal costs had indicated that the regional system could be justified for the selected study areas. The least cost system for the five countries have two regional landfills. The annual costs associated with this system of \$ 447.275, was found to be substantially lesser than the amount of \$ 519,815 estimated for the system with each county operating the system independently. The results of the economic analysis had indicated that a regional system for the solid waste collection and disposal could be justified from the standpoint of view of costs.

Kumar et al. [17] had applied the fuzzy regression approached of forecasting for the years 2007 to 2024. The Study had emphasised the importance of forecasting the waste composition and the significance of the waste segregation for the efficient operation of the various reuse-recycle treatment and for producing efficient disposal facilities. The fuzzy regression coefficient was estimated based on the historical data of socioeconomic conditions (in this study, per capita income, GDP, persons per household, Total Population and Density) and the respective solid waste compositions (in this study; paper waste, plastics, food items, metals, glass pieces and other wastes). The fuzzy regression analysis had estimated the variations in the composition of the wastes: the percentages of wastes paper and food wastes

#### *Economics of Solid Waste Management: A Review DOI: http://dx.doi.org/10.5772/intechopen.95343*

were expected to decrease from 29.50 to 24.58 per cent and from 36.37 to 27.55 per cent, respectively, between the years 2007 and 2024. On the other hand, the waste of plastic contents was expected to increase from 2.74 to 3.55 per cent. The most significant changes were expected in respect of the percentage changes in the case of metals and glass, which had been estimated to increase by three times and two times, respectively, as compared to the present percentage levels. Maria Eugenia Ibarraran Viniegra [18] had attempted to examine the people's willingness to pay for making improvements in the quality of the environment that could be brought about by a proper garbage collection system. The Study had carried out an econometric estimation of the determinants of Willingness to pay for environmental quality in San Pedro Cholula and was focused on the Municipality of San Pedro Cholula, located to the North of the city of Atlixco and to the West of the city of Pueble. Its area was 712 square kilometres and its population was approximately 150,000 inhabitants. The majority (36.5 per cent) of them was agricultural engaged in activities, and next in important were people engaged in arts and crafts and workers (14.5 per cent); and businessmen (8.3 per cent). An average Willingness to pay for the Project was \$ 1.85 dollar her month per household. Age was a factor of significance and it was having an inverse relationship with to Willingness to Pay. The relationship between environmental ethics and that of Willingness to pay had shown a contradiction between people's willingness to pay and their interest for environmental quality. This might be due to the fact that they did not express their true Willingness to pay because they feared that the garbage collection fees might increase. Finally, they had suggested a step towards valuation of the environmental quality and had allowed for making investment decisions with more and better information in Developing Countries.

Sarkhel and Banerjee [19] had calculated the economic value of municipal solid waste management in West Bengal. This study had interviewed 570 individual households and the mean Willingness to pay from the responses to the open-ended questions was calculated to be Rs. 12. with a median at Rs. 5.00 and a 75 per cent of the respondents expressing their willingness to pay at less than Rs.10.00, the distribution appeared to be skewed to the left with a very few extreme observations in the right-tail, pulling the mean substantially to a higher had level than that of the median. The Authors had also estimated the benefits that could derive by adopting the improved system of municipal waste management in Bally the Municipality in West Bengal. Altaf and Deshazp [20] had studied about the problem of the "Household Demand for Improved Solid Waste Management in: Pakistan" and the objectives of the study focused on integrating the demand side information into the planning process. Most of the attempts at improving the performance had been focused on the supply-side issues such as the collection, disposal and the capacity but had not yielded significant results. The sampling frame was provided by the Federal Bureau of Statistics (FBS). This census sampling frame work divided Gujranwala into 436 enumeration Blocks which represented the neighbor hoods containing 200 to 250 households. The Blocks were stratified according to income by the FBS. This stratification was retained for the study as the municipal solid waste services were provided at the block level and not at the household level. This study had followed stratified random sampling method for 1000 households. The distribution of the wastes from both the houses and the streets were tabulated at the disposal sites. About 20 per cent of the households had reported that their wastes were collected directly by the municipal disposal collectors using handcarts. The remaining households had disposed of the wastes outside their in houses with only 2 per cent of them doing so in bins provided by the municipal corporation. The most common disposal site, reported by 30 per cent of households, was an empty plot in the neighbourhood.
