Estimation of Willingness to Pay for Drinking Water Quality Improvement

Yongsung Cho and Hong Jin Kim
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Yongsung Cho: Korea University
Hong Jin Kim: National Center for Environmental Economics

Korean Economic Review, 2001, vol. 17, 347-359

Abstract: This study estimated individuals' compensating surplus (CS) as a measure of willingness to pay (WTP) for improving their drinking water quality and analyzed what factors influence their WTP. The drinking water supply is normally fixed and becomes constraints on each individual's choice of a consumption bundles. Individuals cannot adjust quantities of environmental goods supplied and therefore, CS would be the most appropriate measure of welfare changes for drinking water quality. A contingent valuation study was conducted for residents in the nine communities of southwestern Minnesota that experienced excessive hardness in their water. Censored tobit analyses showed that individuals were willing to pay $3.45 per month to reduce the level of hardness in their water. The aggregate annual WTP for those communities was estimated $1.26 - $2.01 millions.

Keywords: WTP; CS; Water Quality (search for similar items in EconPapers)
JEL-codes: Q25 Q26 (search for similar items in EconPapers)
Date: 2001
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