Economic perspectives on the siting of a municipal solid waste facility

LULU (Locally Unwanted Land Use) and NIMBY (Never In My Back Yard) are often cited as two major hurdles to overcome for successful siting of a noxious facility. Among various types of waste in Korea, food waste has been posing a serious problem for its high rate of moisture and salt component (MOE 2001). This has necessitated siting of large scale composting facilities around the country. Although there has been an increasing number of studies on NIMBY towards siting of noxious facilities, one can hardly find a study on NIMBY attitudes toward a composting facility from an economic perspective. To analyze NIMBY attitude of residents in Cheju City, Korea toward hosting a composting facility, we base our theoretical analysis on the expected utility theory and subsequently use a MNLM (muitinomial logit model) for empirical analysis. This study consists of four major parts: theoretical analysis, data management, MNLM estimations, and interpretation. A theoretical model is constructed by maximizing expected utility: first, a two-choice model, then extending it to a three-choice model to incorporate residents' uncertain attitudes toward a composting facility, providing a theoretical basis for using MNLM model. Our empirical results show with statistical significance that the higher the income, the stronger the NIMBY attitude towards siting a composting facility. Further, it shows that the negative effect of economic benefits on NIMBY attitude is (marginally) stronger than the positive effect of environmental concern, which contrast with what is usually observed in US where the effect of environmental concern dominates over that of economic benefits. Socio-demographic variables included to have the economic variables controlled for are mostly insignificant. Further, from our empirical results is deduced that the residents gave uncertain responses are tilted towards accepting the composting facility.