From Linear to Circular: Empirical Evidence of Circular Economy Adoption and Willingness to Pay in an Indonesian Coastal City

Meylin Rahmawati (Borneo Tarakan University, Indonesia)
Sulistya Rini Pratiwi (Universitas Gadjah Mada, Indonesia)
Anindya Arman Putri (Universitas Gadjah Mada, Indonesia)
Rizky Agusriyanti Irna (Borneo Tarakan University, Indonesia)
Kartini Kartini (Borneo Tarakan University, Indonesia)

Journal of Economic Education and Entrepreneurship Studies
Vol. 7 No. 1 (2026)

This study aims to: (1) estimate WTP and aggregate waste fee revenue potential; (2) evaluate community preferences for six CE strategies and their fiscal feasibility; (3) identify determinants of WTP using binary logistic regression; and (4) formulate an evidence-based policy portfolio to close the financing gap in Tarakan City's waste management system. Using CVM and binary logistic regression on 350 households (2024): (1) mean WTP of IDR 174,500/household/year yields IDR 3.93 billion/year aggregate (95% CI: IDR 3.60–4.26 billion) or 71% cost recovery; (2) CE strategy BCR hierarchy: reduce (∞) > reuse/recovery/sorting (1.46) > recycle (0.73) > repair (0.29); (3) Income (OR=2.14; p<0.05) and Education (OR=1.87; p<0.05) are the only significant WTP determinants — confirming the value-action gap and falsifying the information deficit model; (4) a three-level policy portfolio achieves near-full fiscal self-sufficiency (≈99.8% cost recovery) through progressive tariffs and recycling monetization.