Households' Willingness to Pay for Improved Water Supply in Combo1cha Town, South Wollo
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Date
2008-06
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Addis Ababa University
Abstract
This paper tries to examine and analyze households' willingness to pay for improved water
supply in Comboldw town, Soutlt Wallo Etltiopia. It also explores determinants of
willingness to pay and examine the applicability of cost recovery strategy.
A contingent valuation method based on a single bounded dichotomous choice format
followed by open ended question was employed. A total of 247 saml)le Iwuseholds ran(lomly
selected from all kebeles of Combolcha town were covered during the survey.
Responses to tlte valuation questions revealed thot 98.6% of the respondents expressed their
willingness to have private connection to the new improved water and are willing to pay for
the new service with mean willingness to pay of 15.70 cents. This implies that, on average,
the respondents are WiLling to pay birr 7.85 for one m' of improved water sewice which is
greater than even twice of tlte town's highest consumption block.
Results of the probit model also show tlwt income, initial bid, and attitude of tlte respondent
for tlte responsibility of town water provision Iwve positive effects and age of tit< head of the
household Iws a negative effect on the Iwuselwlcls' choice for improved water services. This
implies that Iwuselwlds with high incont< are more likely to choose improved services.
However, there is a tendency for aged Iwuseholds not to choose the improved water sewice.
Mean willingness to pay for the probit model is 26.10 cents per 20 liters water, which
implies tlwt rIte mean willingness to pay for the new improved water supply ranges between
15.70 to 26.10 cents.
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Willingness to Pay for Improved Water Supply