Assessment of the Impact on Household Welfare of Pressurized Potable Water Supply in Northern Cyprus

Arif Yurtsev () and Glenn Jenkins ()
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Arif Yurtsev: Economist,Cambridge Resource International Inc.

No 2019-03, Development Discussion Papers from JDI Executive Programs

Abstract: This paper first contains an estimation of the willingness to pay by for reliable potable water supply of households in a situation where a public water supply is available but the quality of the service is such that the water is neither reliable nor potable. This is a problem that plagues millions of households living cities in both low and middle income countries. The analysis is carried out by measuring the averting expenditures undertaken by households. Second, a cost-benefit analysis is conducted in order to measure the net benefit gained by households from investments to upgrade the existing municipal water distribution systems in Northern Cyprus so that it would be able to continuously deliver potable water to all households. It is found that average willingness to pay for reliable water supply is 22.4 TL/m3 (3.73 Euro/m3). On the basis of the economic cost-benefit analysis, we find that present value of total economic benefits of households are six times of the total investment costs of replacing all the water distribution system within the city of Famagusta. The present value of the net benefit per household is on average 23,644 TL (3,940 Euro). Each year, every household is losing 2,500 TL (416 Euro) if the completing of the rehabilitation is delayed.

Keywords: Willingness to pay; cost-benefit analysis; water supply project; North Cyprus. (search for similar items in EconPapers)
JEL-codes: D14 D61 L95 Q53 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2019-03
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