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Water pricing with household surveys: A study of acceptability and willingness to pay in Chongqing, China

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Author Info

  • Wang, Hua
  • Xie, Jian
  • Li, Honglin
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Abstract

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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Bibliographic Info

Article provided by Elsevier in its journal China Economic Review.

Volume (Year): 21 (2010)
Issue (Month): 1 (March)
Pages: 136-149

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Handle: RePEc:eee:chieco:v:21:y:2010:i:1:p:136-149

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Web page: http://www.elsevier.com/locate/chieco

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Keywords: Water price Acceptability Affordability Willingness to pay China;

References

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  1. Wang, Hua & Whittington, Dale, 2005. "Measuring individuals' valuation distributions using a stochastic payment card approach," Ecological Economics, Elsevier, vol. 55(2), pages 143-154, November.
  2. Garcia, Serge & Reynaud, Arnaud, 2004. "Estimating the benefits of efficient water pricing in France," Resource and Energy Economics, Elsevier, vol. 26(1), pages 1-25, March.
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  7. Fankhauser, Samuel & Tepic, Sladjana, 2007. "Can poor consumers pay for energy and water? An affordability analysis for transition countries," Energy Policy, Elsevier, vol. 35(2), pages 1038-1049, February.
  8. Mary F. Evans & Nicholas E. Flores & Kevin J. Boyle, 2003. "Multiple-Bounded Uncertainty Choice Data as Probabilistic Intentions," Land Economics, University of Wisconsin Press, vol. 79(4), pages 549-560.
  9. Pattanayak, Subhrendu K. & van den Berg, Caroline & Yang, Jui-Chen & Van Houtven, George, 2006. "The use of willingness to pay experiments : estimating demand for piped water connections in Sri Lanka," Policy Research Working Paper Series 3818, The World Bank.
  10. Raje, D. V. & Dhobe, P. S. & Deshpande, A. W., 2002. "Consumer's willingness to pay more for municipal supplied water: a case study," Ecological Economics, Elsevier, vol. 42(3), pages 391-400, September.
  11. Welsh, Michael P. & Poe, Gregory L., 1998. "Elicitation Effects in Contingent Valuation: Comparisons to a Multiple Bounded Discrete Choice Approach," Journal of Environmental Economics and Management, Elsevier, vol. 36(2), pages 170-185, September.
  12. Li Chuan-Zhong & Mattsson Leif, 1995. "Discrete Choice under Preference Uncertainty: An Improved Structural Model for Contingent Valuation," Journal of Environmental Economics and Management, Elsevier, vol. 28(2), pages 256-269, March.
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Cited by:
  1. He, Y.X. & Xia, T. & Liu, Y.Y. & Zhou, L.F. & Zhou, B., 2013. "Residential natural gas price affordability analysis–A case study of Beijing," Renewable and Sustainable Energy Reviews, Elsevier, vol. 28(C), pages 392-399.
  2. Jiang, Yi & Jin, Leshan & Lin, Tun, 2010. "Higher Water Tariffs for Less River Pollution—Evidence from Min River and Fuzhou City, People’s Republic of China," ADB Economics Working Paper Series 201, Asian Development Bank.
  3. Wang , Hua & He, Jie & Kim, Yoonhee & Kamata, Takuya, 2011. "Municipal solid waste management in small towns : an economic analysis conducted in Yunnan, China," Policy Research Working Paper Series 5767, The World Bank.

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