Household Willingness to Pay for Provision of Improved Urban Water Supply Service in Chagni Town, Amhara Region, Ethiopia
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Date
2020-10
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Addis Ababa University
Abstract
Household Willingness to pay for provision Improved Urban Water Supply Service in Chagni
Town, Amhara Region, Ethiopia
Yamert Berihun
Addis Ababa University, 2020
Good quality, reliable and affordable supply of drinking water is a basic need for human life.
However, many people in LDCs are lacking this safe and quality water. Since Ethiopia is one of
these LDCs its urban area population does not have access to such attributes of water. Therefore,
reliability and quality are crucial for household water supply. In this study the CVM was used to
analyze the determinants of households’ WTP for improved water services by applying the single
bounded dichotomous choice value elicitation format. The study used cross-sectional data
collected from 300 randomly selected sampled households from Chagni town. The CV survey
responses were analyzed through descriptive and econometric analysis using Probit and Tobit as
empirical models.
The CV survey results revealed that 264 (87.96%) of the respondents were willing to pay a
positive amount for improved water services. Therefore if the proposed water improvement
scheme is implemented, in addition to satisfying the water needs of the households, the towns’
utility management can collect more revenue from the sale of improved water. The CV survey
results also show that the mean WTP of households for the proposed improved water service is 30
cents per jerry can depending on the method used.
Results from the probit and Tobit model showed that Household distance, respondent age,
respondent family size, Initial bid per jerican and available improver water service have
significant effects on willingness to pay improved town water service, While the water born
disease and initial bid price for water services have significant and negative effect on the
probability of WTP for improved water services.
Therefore, policy makers need to take in to consideration these socio-economic and demographic
factors and some other attributes of water in designing the improved water supply system of the
towns.
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Keywords
Household Willingness to pay, Contingent valuation method, improved water service, Chagni town