WILLINGNESS TO PAY FOR WATER SERVICE IMPROVEMENTS IN MIDDLE‐INCOME URBAN HOUSEHOLDS IN SOUTH AFRICA: A STATED CHOICE ANALYSIS

J.d. Snowball, K.g. Willis and C. Jeurissen

South African Journal of Economics, 2008, vol. 76, issue 4, 705-720

Abstract: Water provision is not only an economic issue in South Africa, but also of social and political significance. One of the important reasons for increasing the brief of local government is so that services can be provided taking into account heterogeneous community preferences. However, measuring such preferences for water, which has some public good characteristics, is a challenge. This study elicits household willingness to pay for improvements in water attributes in Grahamstown West in the Eastern Cape, using conjoint analysis. Results show a fairly high McFadden R2 and that Bacteria Count, Discolouration, Interruptions to supply and Price are statistically significant determinants of choice. The paper also suggests ways in which the model could be adapted for use in lower income and education households.

Date: 2008
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