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Social Capital and the Willingness to pay for Environmental Goods in African Countries

Urban Thierry Yogo, University of Yaounde II- Cameroon

There are several studies investigating the willingness to pay (wtp) for environmental goods. Most of these studies highlight the fact that the relationship between the WTP for environmental good and the GDP per capita is an inverted U shaped one. In other words, the low income countries, specifically Africa countries exhibit a low or weak WTP. However, these studies have neglected the influence of social capital. In fact social capital can positively affect the WTP through two main channels, namely information effect and peer effect. Thus, even in low income countries, the WTP for environmental goods can be very high.

Then the main objective of this paper is to show that there is a positive relationship between individual social capital and the WTP for environmental goods. In order to achieve this objective, we make use of five waves of the World Value Survey (1981-2007).  We also take advantage of the scale structure of the WTP using ordered Logit estimations. The obtained results confirm our intuition about the positive effect of social capital on the WTP. This suggests that government should promote civil associations enable to convey reliable and useful information about environment issues and stimulate peer effects among their members.