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Willingness to Pay and Cost Recovery of Urban Drinking Water Supply: A Choice Model Approach


<p>Financial resources are crucial to improve existing urban drinking water supply in developing countries. Cost recovery rates of these services are typically low while demand for more reliable services is high and rapidly growing. Most stated preference based demand studies in the developing world apply the contingent valuation method and focus on rural areas. This study examines the willingness of households to pay for improved water supply services employing a choice model (CM) in an urban context in Ethiopia, Hawassa, where a household survey of 170 households in the city, about 300km south of the capital city of Ethiopia, Addis Ababa, with a total population of about 160,000(CSA,2007) was conducted. The design of the choice model allows the estimation of the values of two attributes of drinking water supply service (frequency of water supply per week and its quality). The study found that households are willing to pay up to 60 percent extra for improved levels of water supply over and above their current water bill. Especially those households living in the poorest part of the city with the lowest service levels demonstrate that they are willing to pay more despite significant income constraints they are facing. Women value the improvement of water quality most, while a significant effect is found for averting behavior and expenditures. The estimated economic values can be used in policy appraisals of investment decisions</p>

Corporate Author: 
Worku Gebeyehu & Demirew Getachew (Editors). ; Ethiopian Economic Association. Awassa Chapter
Ethiopia Economics Association (EEA)
Primary Descriptors: 

<p>Choice modeling, Domestic water demand</p>

Secondary Descriptor: 

<p>Willingness to pay</p>

Geographic Descriptors: 
Cataloge Date: 
Broad Subject heading: 
Water supply
Call Number: 
330.963 PRO 2012
Serial Key Title: 
Proceedings of the Second Regional Conference of the SNNPRs Economic Development
Publication catagory: 
Content type: 
Publication date: 
2013-08-27 00:00:00
Forum or Discussion date: 
2013-02-27 00:00:00
Conference Place: 
Hawassa, Ethiopia
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
Current frequency: 
Thematic area: 
Regional Conference of the SNNPRs Economic Development
Chapter conference: 
Conference date: