Willingness to Pay and Cost Recovery of Urban Drinking Water Supply: A Choice Model Approach

Course ID
Ethiopian Economics Association (EEA)
Solomon Tarfasa


Financial resources are crucial to improve existing urban drinking water supply in developing countries. Cost recovery rates of these services are typically low while demand for more reliable services is high and rapidly growing. Most stated preference based demand studies in the developing world apply the contingent valuation method and focus on rural areas. This study examines the willingness of households to pay for improved water supply services employing a choice model (CM) in an urban context in Ethiopia, Hawassa, where a household survey of 170 households in the city, about 300km south of the capital city of Ethiopia, Addis Ababa, with a total population of about 160,000(CSA,2007) was conducted. The design of the choice model allows the estimation of the values of two attributes of drinking water supply service (frequency of water supply per week and its quality). The study found that households are willing to pay up to 60 percent extra for improved levels of water supply over and above their current water bill. Especially those households living in the poorest part of the city with the lowest service levels demonstrate that they are willing to pay more despite significant income constraints they are facing. Women value the improvement of water quality most, while a significant effect is found for averting behavior and expenditures. The estimated economic values can be used in policy appraisals of investment decisions

Corporate Author: Worku Gebeyehu & Demirew Getachew (Editors). ; Ethiopian Economic Association. Awassa Chapter
Publisher: Ethiopia Economics Association (EEA)
ISBN/ISSN: 978-99944-54-28-10
Primary Descriptors:

Choice modeling, Domestic water demand

Secondary Descriptor:

Willingness to pay

Geographic Descriptors: Ethiopia
Cataloge Date: 02/27/2013
Broad Subject heading: Water supply
Call Number: 330.963 PRO 2012
Serial Key Title: Proceedings of the Second Regional Conference of the SNNPRs Economic Development
Publication catagory: Regional Conference
Content type: EEA Publication
Publication date: 2013-08-27 00:00:00
Forum or Discussion date: 2013-02-27 00:00:00
Edition: 2nd
Conference Place: Hawassa, Ethiopia
Place of publication: Addis Ababa, Ethiopia
Type of material: Book
Current frequency: Annualy
Thematic area: Regional Conference of the SNNPRs Economic Development
Author: Solomon Tarfasa
Chapter conference: SNNPR
Conference date: 2009