Households’ Willingness to Pay for Improved Water Supply: Application of the Contingent Valuation Method; Evidence from Jigjiga Town, Ethiopia

Shemelis Hundie and Lamessa Abdisa

Romanian Economic Journal, 2016, vol. 19, issue 62, 191-214

Abstract: Water problem in developing countries like Ethiopia is twofold: low coverage levels and poor quality that require urgent attention to reduce associated health and social consequences. Understanding this fact, the government and NGOs are currently carrying out several activities to improve the coverage and quality of water supply. To this end, willingness to pay of households that are expected to be benefited from the project should be analysed. The central objective of this study is, hence, to estimate Willingness to Pay (WTP) of households for better-quality water service provision and identify its determinants by using Contingent Valuation Method (CVM) in Jigjiga city. We estimate Willingness to Pay (WTP) for better quality of water supply service on cross-sectional survey of households in Jigjiga city taking 210 sample households randomly drawn. The highest relative WTP for improved water supply service was found in the city with the highest percentage of respondents being unsatisfied with the current water supply both in terms of quality and quantity. Response to the hypothetical scenario shown that sampled households stated that their mean WTP of 94 cents per 20 litres. The results of logit model revealed that household income, family size, water source, age of the respondent and bid value have significant effects on WTP for improved water service provision. The implication is that it is better take into account the socio-economic characteristics of the households in planning and designing water supply projects, which may serve to set rigorous demand oriented projects that can sustain the service delivery.

Keywords: Willingness to Pay; Contingent Valuation Method; Improved Water Service; Jigjiga (search for similar items in EconPapers)
JEL-codes: Q50 Q51 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.rejournal.eu/sites/rejournal.versatech. ... -03/3411/yhundie.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rej:journl:v:19:y:2016:i:62:p:191-214

Access Statistics for this article

Romanian Economic Journal is currently edited by Ioan Popa, PhD

More articles in Romanian Economic Journal from Department of International Business and Economics from the Academy of Economic Studies Bucharest Contact information at EDIRC.
Bibliographic data for series maintained by Radu Lupu ().