Publication: Water Pricing with Household Surveys: A Study of Acceptability and Willingness to Pay in Chongqing, China
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Date
2010
ISSN
1043951X
Published
2010
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In determining domestic water prices, policy makers frequently need to use demand-side information rather than only rely on supply-side data as previously did, and household surveys are often conducted to collect information on the demand side. This paper presents a multiple bounded discrete choice (MBDC) survey model for collecting information about acceptability of different water prices by different types of households and estimating households' willingness to pay for water service improvement. The results obtained from MBDC surveys can be directly utilized in the development of water pricing and subsidy policies. An empirical MBDC study is conducted in Chongqing, China, where domestic water service quality was seriously inadequate, but financial resources were insufficient to improve the service quality. With a survey of 1500 households in five suburban districts in Chongqing Municipality, this study shows that a significant increase in water price is economically feasible as long as the poorest households are properly subsidized. The analysis also indicates that the order in which hypothetical prices are presented to the respondents with the MBDC method can systematically affect the answers and should be taken into account when designing such survey instruments.
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Publication Domestic Water Pricing with Household Surveys : A Study of Acceptability and Willingness to Pay in Chongqing, China(World Bank, Washington, DC, 2008-08)In determining domestic water prices, policy makers often need to use information about the demand side rather than only relying on information about the supply side. Household surveys have frequently been employed to collect demand-side information. This paper presents a multiple bounded discrete choice household survey model. It discusses how the model can be utilized to collect and analyze information about the acceptability of different water prices by different types of households, as well as households' willingness to pay for water service improvement. The results obtained from these surveys can be directly utilized in the development of water pricing and subsidy policies. The paper also presents an empirical multiple bounded discrete choice study conducted in Chongqing, China. In this case, domestic water service quality was seriously inadequate, but financial resources were insufficient to improve service quality. With a survey of about 1,500 households in five suburban districts in Chongqing Municipality, this study shows that a significant increase in the water price is feasible as long as the poorest households can be properly subsidized and certain public awareness and accountability campaigns can be conducted to make the price increase more acceptable to the public. The analysis also indicates that the order in which hypothetical prices are presented to respondents systematically affects their answers, and should be taken into account when designing survey instruments.Publication The Impact of Tap Connection on Water Use : The Case of Household Water Consumption in Dakar, Senegal(2010)Predicting residential water demand for non-connected households that obtain connections is a crucial issue for water planners in developing countries. We propose a technique derived from Heckman (1976) to accurately measure the expected increase in water use due to access to tap water while controlling for differences in characteristics between connected and non-connected households. Illustration is made on a cross section of 246 households from Dakar, Senegal. We show that getting a tap connection induces an expected increase in water use of 26 L per capita per day.Publication The Value of Water Connections in Central American Cities: A Revealed Preference Study(2009)We estimate annualized values of access to home tap water in three cities in El Salvador, and marginal 'barrios' in four Guatemalan cities, using a hedonic price method for studying changes in capitalized home values from obtaining a water connection. A tap water connection is found to add from 10 per cent to 52 per cent to sales values of homes in our sample. The estimated mean values of gaining tap water access represent 1-5 per cent of real household income, differing by city and with generally higher values in El Salvador. On average this gain eliminates between 1 per cent and 3 per cent of the initial difference in real incomes between the groups of connected and unconnected households. We also find large differences in the value of a tap connection depending on the main source of non-tap water, with lowest values when the source is a private well in El Salvador.Publication Poor Household Participation in Payments for Environmental Services: Lessons from the Silvopastoral Project in Quindio, Colombia(2010)As the use of Payments for Environmental Services (PES) approaches in developing countries has grown, concern has arisen over the ability of poorer households to participate. This paper uses data from a PES project implemented in Quindio, Colombia, to examine the extent to which poorer households that are eligible to participate are in fact able to do so. The project provides a strong test of the ability of poorer households to participate in a PES program as it required participants to make substantial and complex land use changes. The results show that poorer households are in fact able to participate at levels that are broadly similar to those of better-off households. Moreover, their participation was not limited to the simpler, least expensive options. Transaction costs may be greater obstacles to the participation of poorer households than household-specific constraints.Publication Sources of Mistrust: An Experimental Case Study of a Central Asian Water Conflict(2010)With the disintegration of the USSR a conflict arose between Kyrgyzstan, Uzbekistan and Kazakhstan over the transboundary Syr Darya river. Upstream Kyrgyzstan controls the Toktogul reservoir which generates hydropower demanded mainly in winter for heating. Downstream Uzbekistan and Kazakhstan need irrigation water in summer, primarily to grow an export crop (cotton). Regional agreements obliging Kyrgyzstan to higher summer discharges in exchange for fossil fuel transfers from downstream riparians in winter have been unsuccessful, due to lack of trust between the parties. Striving for self-sufficiency in irrigation water, Uzbekistan initiated new reservoir construction. This paper examines their economic impact. We report a laboratory experiment modelling the Syr Darya scenario as a multi-round, three-player trust game with non-binding contracts. Payoff schemes are estimated using real-life data. While basinwide efficiency maximisation requires regional cooperation, our results demonstrate that cooperation in the laboratory is hard to achieve. Uzbek reservoirs improve cooperation only weakly and their positive impact is limited to low-water years.
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