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Demand for piped drinking water and a formal sewer system in Bhutan

Ngawang Dendup and Kuenzang Tshering
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Kuenzang Tshering: Royal University of Bhutan

Environmental Economics and Policy Studies, 2018, vol. 20, issue 3, 681-703

Abstract: Abstract In this study, we estimate demand for sewage connection and piped drinking water in Bhutan. To estimate household willingness to pay, we use data from a sample of 8968 households surveyed through the Bhutan Living Standard Survey of 2012. A hedonic model is estimated using Heckman two-step procedure to overcome the problem of sample selection bias. On average, households in Thimphu city are willing to pay Nu 452 (USD 7) and Nu 124 (USD 2) per month for piped drinking water connections and sewage, respectively. This translates to 8 and 2% of their monthly household expenditure for water and sewage connection, respectively. The households in Thimphu are willing to pay significantly more than the current joint charge of Nu 78 per month for water and sanitation. There is scope for municipal offices in Bhutan to increase their revenues from public services and to cover potential investment, maintenance and operational costs associated with water and sewage services.

Keywords: Hedonic; Bhutan; Sewage; Water; WTP; Heckman (search for similar items in EconPapers)
JEL-codes: Q25 Q51 Q52 Q53 Q56 (search for similar items in EconPapers)
Date: 2018
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Working Paper: Demand for Piped Drinking Water and a formal Sewer System in Bhutan (2015) Downloads
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