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The willingness to pay for flood mitigation project in Chukai, Kemaman,
using the Contingent Valuation Method (CVM) with double-bounded
approach
Ahmad Syahmi bin Mohamad
Supervisor: Dr Jaharudin Padli
Sarjana Muda Ekonomi (Sumber Alam)
Pusat Pengajian Pembangunan Sosial
Flood is a disaster that often happens in Malaysia. The problem has been taken
seriously by all parties because it affects the ecosystem and human beings. Therefore,
a project to control flood disaster was proposed. However, there were some
constraints in implementing the flood control project. A high cost was required to carry
out the project but the financial assistance provided by the government was
insufficient. This study was carried out to analyse the willingness of randomly chosen
104 residents of Chukai, in Kemaman, Terengganu to pay (WTP) for the cost of the
proposed project, and to identify the factors contributing to their willingness. WTP
questionnaires which were developed based on the Logit Model were distributed to
the respondents to gather data on their perceptions. WTP consisted of six dimension
and one of them focused on priced bid to choose one bid price among the options
given (RM10, RM20, RM30, and RM40). Stata software was used to analyse the data
obtained. The findings revealed that the average amount (mean) of money that the
respondents were willing to pay for the project was only RM29. Household income and
bid price were identified as the main two factors contributing to the respondents’
willingness to pay. A positive significant correlation (r= 0.003) was found between
household income and WTP, and negative significant correlation (r = 0.029) was found
between bid price and WTP. The results implied that the higher price bid, the lesser
is their willingness to pay (WTP) for the project. This means that the respondents are
not willing to pay much for the project and simply wait or expect for subsidies from
the government.
1418 | UMT UNDERGRADUATE RESEARCH DAY 2018