Diponegoro Journal of Economics
Vol 14, No 3 (2025)

Estimating Willingness to Pay for Citarum River Water Quality Improvements using Benefit Transfer

Mabengba David Aja Kofi (Development Economics Study Program, Faculty of Economics and Business, Sebelas Maret University, Surakarta, Indonesia)
Evi Gravitiani (Development Economics Study Program, Faculty of Economics and Business, Sebelas Maret University, Surakarta)



Article Info

Publish Date
04 Feb 2026

Abstract

This study estimates households’ willingness to pay (WTP) for a 50% reduction in Citarum River pollution using a benefit transfer (BT) approach based on contingent valuation (CV) evidence from the Mekong River basin. The novelty of this study lies not in methodological innovation, but in the context-specific application of a function-based benefit transfer framework to one of Indonesia’s most polluted river systems, combined with explicit sensitivity and transfer-error analysis in a data-scarce setting. The paper contributes by demonstrating how BT can be responsibly applied as a screening and prioritization tool for environmental policy while clearly separating valuation results from speculative economic impact claims. Using a calibrated WTP function, the estimated mean WTP is IDR 45,000 (USD 3.10) per household per month, corresponding to an aggregated annual economic value of approximately IDR 5.4 trillion (USD 370 million) for 10 million households. Sensitivity analysis and a transfer error of 6.25% indicate acceptable reliability relative to international BT benchmarks. These findings provide policymakers with credible, transparent valuation evidence to inform river restoration planning and financing decisions in developing-country contexts where primary valuation data are limited.

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Journal Info

Abbrev

jme

Publisher

Subject

Economics, Econometrics & Finance

Description

Media publikasi karya ilmiah lulusan S1 Prodi Ilmu Ekonomi dan Studi Pembangunan Fakultas Ekonomika dan Bisnis Universitas Diponegoro yang berisi tentang kajian pembangunan dan kajian ekonomi beserta seluruh ...