Household Willingness to Pay for Improved Water Service in Bahir Dar Town of Amhara Regional State: The Application of Stated and Revealed Preference Methods.

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Adequacy and quality are crucial for household water supply. One of the major problems with public utilities such as drinking water in developing countries is intermittent, insufficient and unreliable supply. Bahir Dar is no exception to this. To combat these problems, household engage in a variety of averting behaviors. Some of the major strategies are storing, treating and purchasing The study uses the combination of contingent valuation and averting expenditure approaches to examine the relationship between selected socio-economic characteristics of household and their willingness to pay for the improved water service and for water quality improvement A single bounded close endedfollowed by open ended question was used to obtain Household's WTP for the improved water service. The study used survey data Fom 246 Household randomly selected Fom Bahir Dar town and the Probit, OLS and Multinomial Logit regression technique was used to estimate the effects of selected exogenous variables on willingness to pay. The survey result also shows that mean willingness to pay for one bucket or for 20 liter of improved water service is 14.21 and 14.96 cents according to the dichotomous choice and open-ended survey responses respectively. The total willingness to pay for one bucket or 20 liters of improved water services is Birr 4,160.52 per day or Birr 1,518,588.41 per year. The results of the econometrics model show that household income, quality and type of water source, children age less than or equal to three and level of education, and age of the head of the household are the principal factors influencing willingness. This suggests· ihat, any government policy which increases factors that will increase household's willingness will increase their willingness to pay. In addition, because consumers ' income is associated with their willingness to pay, it is suggested that policy on user fees recognize income inequalities when determining the amount that household should pay.



of Amhara Regional State, The Application of Stated and Revealed Preference Methods.