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Please use this identifier to cite or link to this item: http://hdl.handle.net/123456789/3276

Advisors: Dr. Alemu Mekonnen
Keywords: Willingness to pay, Contingent valuation method, Improved Water service.
Copyright: Jun-2011
Date Added: 5-Jul-2012
Publisher: AAU
Abstract: Adequate quality, safe and affordable supply of drinking water is a basic need for human life. However, many people in LDCs are lacking this safe and quality water. Since Ethiopia is one of these LDCs its urban and rural area population do not have access to such attributes of water. Therefore adequacy and quality are crucial for household water supply. In this study the CVM was used to analyze the determinants of households’ WTP for improved water services by applying the doublebounded dichotomous choice value elicitation format. The study used cross-sectional data collected from 220 randomly selected sampled households from Motta town. The CV survey responses were analyzed through descriptive and econometric analysis using probit, bi- variate probit and Tobit as empirical models. The CV survey results revealed that 199 (96.6%) of the respondents were willing to pay a positive amount for improved water services. Thus if the proposed water improvement scheme is implemented, in addition to satisfying the water needs of the households, the town’s utility management can collect more revenue from the sale of improved water. The CV survey results also show that the mean WTP of households for the proposed improved water service is between 19.2 cents and 25.83 cents depending on the method used. The total WTP amount from the total of 10,898 households in Motta town was founded to be birr 8,198.2 per day or birr 2,992,343 per year which is much higher than the current total revenue of birr 475,325 collected by the utility management . The results from the test statistics show that existing source of water, initial bid offered to households, age of the respondents, sex of the respondents and responsible organ for the provision of improved water services have a negative effect on the probability of households’ WTP for improved water services in the probit model and at the same time they have also a negative influence on the maximum amount they are willing to pay in the tobit model. On the other hand education (both primary, secondary and tertiary), income, wealth, quality of water being used, reliability of the existing service, years of stay in the town, time taken to fetch water from the existing source and level of satisfaction with the existing service are affecting positively the probability of accepting the initial bid offered to them for improved water service and the maximum amount that they are willing to pay. Therefore the policy makers need to take in to consideration these socio-economic and demographic factors and some other attributes of water in designing the improved water supply system of the town.
Description: A Thesis submitted to the School of Graduate Studies of Addis Ababa University in Partial Fulfillment of the Requirements for the Degree of Master of Science in Economics (Natural Resource and Environmental Economics)
URI: http://hdl.handle.net/123456789/3276
Appears in:Thesis - Economics

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