Households Willingness to Pay for Improved Water Supply Services in Addis Ababa City.

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Addis Ababa University


The major objective of this study is to estimate household willingness to pay for improved sustainable water supply services, and to investigate its determinants in Addis Ababa city of Ethiopia, by using contingent valuation method with a single bounded elicitation format followed by open ended questions. A total of 375 randomly selected sample households were interviewed, both probit and linear regression of ordinary list square model were used to analyze the determinants of households willingness to pay for improvement of water supply services and A mean willingness to pay is found to be 2.78 birr per one bucket or 20 liter of jerican in the probit result and mean willingness to pay 2.01 birr in the open ended format result. Household’s monthly income, sex of household head, family size of household and reliability of water services have positive and significant effects on willingness to pay for improved water supply services in the probit model. On the other hand, initial bid price and age of house hold head have negative and significant effect on the probability of willingness to pay for improved water supply services. The contingent valuation survey result revealed that 323(86.1%) of household heads were found willing to pay additional fee for improved water services. This implies that if proposed water improvement scheme is implemented, in addition to satisfying the water needs of households of the city’s utility management can collect more revenue from the sale of improvement water. If provision of improved water supply service will applied to the city of Addis Ababa water and sanitation authority will collect 286,693,205.50 birr additional revenue. Therefore, the concerned body needs to take in to consideration the socio economic and demographic factors like sex, age, marital status, income, educational status and marital status in designing the improved water supply system of the city.



Willingness to pay, Contingent valuation method, improved water Supply services, Household heads, Addis Ababa