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Please use this identifier to cite or link to this item: http://hdl.handle.net/123456789/565

Authors: Medhin, Fissha
Advisors: Dr Mahmud Yesuf
Keywords: Willingness-to-pay
improved water service
sanitation facility
contingent valuation method
Copyright: 2007
Date Added: 17-Apr-2008
Publisher: Addis Ababa University
Abstract: This paper analyzes determinates of households’ willingness to pay for improved water service, using the contingent valuation method (CVM). The study used cross sectional data collected from 250 households living in different areas of Addis Ababa, Ethiopia through single bounded elicitation format with an open ended follow up question using a face-to face interview. The empirical models adopted by this study to determine factors influencing households’ decisions to connect to the pipe water scheme are Probit and Tobit models. Results of the study revealed that respondents’ WTP is affected by a number of explanatory variables including sanitation facility, water related disease and socio –economic variables like income, age, sex, marital status, education level and family size of the respondent etc. The mean WTP for private connection is found 20 cents per Baldi and 15.79 cents per Baldi from closed ended and open-ended question respectively, which are well above the current subsidized tariff. The following policy implications are derived from the study. First, the positive and significant relation between sanitation facility and WTP implies that improving sanitation service could not be done alone rather it has to go hand in hand with improvements in piped water supply provision. Finally, the revenue and households’ welfare gain in changing the existing policy (low tariff with limited unreliable private service and hence low level equilibrium) to a new (higher tariff with more and improved private connections) can be huge.
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 (Environmental and Resource Economics)
URI: http://hdl.handle.net/123456789/565
Appears in:Thesis - Economics

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