Sustainable Policy for Water Pricing in Kuwait

Ali Aljamal, Mark Speece and Mohsen Bagnied
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Ali Aljamal: College of Business and Economics, American University of Kuwait, Salmiya 24795, Kuwait
Mohsen Bagnied: College of Business and Economics, American University of Kuwait, Salmiya 24795, Kuwait

Sustainability, 2020, vol. 12, issue 8, 1-18

Abstract: This research investigates consumer willingness to pay (WTP) for water in Kuwait as a foundation for policy decisions on reducing water subsidies. Heavy subsidies have encouraged unsustainable very high consumption, but efforts to cut subsidies can generate strong political opposition. A survey ( n = 443) indicates that WTP is greater at lower prices, but resistance is not purely about price. The presence of a continued partial water subsidy for basic household use slightly increases WTP, probably mainly from perceptions of fairness. Information about Kuwait’s water scarcity also has a small impact. All of these effect sizes are small, so we discuss these issues using a nudge framework from behavioral economics. A number of policies can foster small shifts in WTP; collectively they may have larger impact and make subsidy reduction relatively painless.

Keywords: willingness to pay; water pricing; subsidies; sustainability; Kuwait (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:8:p:3257-:d:346695

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