Analysis of the Determinants of Households' Willingness to Pay and Demand for Improved Water Services.: A Contingent Valuation Study in Harar Town (Ethiopia)

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In developing countries, Millions of people are facing daily problems In obtaining water for domestic purposes. recognizing the harm to health economic productivity, And quality of living standard tat can result from inadequate water supplies, governments have been establishing policy and planning to correct the problem. the implementation of such policy decisions should focus on demand sides opposed to the traditional focus on supply side, Pricing mechanisms and regulatory measures that have received much less attention. since need to fill the gap of information on the demand side (Such as household socioeconomic and demographic characteristics and characteristics of the existing and new supplies of water) for policy purpose is timely, researching the demand side in order to understand the household improved water demand behavior and what factors determine their willingness to pay verses their affordability for upgraded water service is crutial. this article, Therefore, Tries to asses the determinants of households willingness to pay and demand for improved water services in harar town which will enable policy makers to design an appropriate water pricing structure and viable cost recovery policies lature of the primary cross-sectional data that we got from our contingent valuation survey in the town, this study used only the direct method to estimate households' willingness to pay for ordered probit models. the study shows that the methodology produced some Illuminating Insights Into the relevant information on household willingness to pay, Which is shown to vary significantly according to household level of income, education level and sex of the household head, Starting point of the bidding game, location of study site, main source o water for the household and perceived quality of the existing water. the study also reveals that the mean willingness to pay (Wtp) for private piped improved water connection is more than 15 times the exiting authority's tariff rate. the tariffs for improved water can be increased substantially with unconstrained supply before insignificant numbers of households would choose not to connect to an improved system. The revenue and households' Welfare gains in changing the existing policy (Low tariff with few unreliable private service) to a new policy (Higher tariff with more and Improved private connections) can be huge .



Determinants, Valuation