Analysis of the Determinants of Households' Willingness to Pay and Demand for Improved Water Services.: A Contingent Valuation Study in Harar Town (Ethiopia)
No Thumbnail Available
Date
1999-05
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
A.A.U
Abstract
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 .
Description
Keywords
Determinants, Valuation