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Factors associated with nonpayment behavior in the water sector of Nicaragua

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  • Vásquez, William F.
  • Alicea-Planas, Jessica

Abstract

Nonpayment behavior by consumers may jeopardize the financial sustainability of water utilities. Yet, little is known about factors underlying nonpayment behavior. This paper identifies determinants of nonpayment in Nicaragua using negative binomial regression models that account for overdispersion in the number of outstanding payments of water bills. We found that the average household had 37 outstanding monthly payments. Nonpayment was found to be inversely associated with consumer satisfaction with the current quality of water service and household income. However, nonpayment was found to be disassociated from the perceived consequentiality of not paying water bills on time. Policy implications are discussed.

Suggested Citation

  • Vásquez, William F. & Alicea-Planas, Jessica, 2017. "Factors associated with nonpayment behavior in the water sector of Nicaragua," Utilities Policy, Elsevier, vol. 47(C), pages 50-57.
    • Handle: RePEc:eee:juipol:v:47:y:2017:i:c:p:50-57
    DOI: 10.1016/j.jup.2017.06.010
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    References listed on IDEAS

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    1. Kertous, Mourad & Zerzour, Sahad, 2015. "To pay or not to pay? Water bill and delay in payment in Bejaia (Algeria): A duration analysis," MPRA Paper 67801, University Library of Munich, Germany.
    2. Szabó, Andrea & Ujhelyi, Gergely, 2015. "Reducing nonpayment for public utilities: Experimental evidence from South Africa," Journal of Development Economics, Elsevier, vol. 117(C), pages 20-31.
    3. 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.
    4. Sarah Bridges & Richard Disney, 2004. "Use of credit and arrears on debt among low-income families in the United Kingdom," Fiscal Studies, Institute for Fiscal Studies, vol. 25(1), pages 1-25, March.
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    Cited by:

    1. Arasteh, Mohammad Ali & Farjami, Yaghoub, 2021. "Supporting Sustainable Rural Groundwater Demand Management with Fuzzy Decision Analysis: A Case Study in Iran," Utilities Policy, Elsevier, vol. 70(C).
    2. Karki, Dipesh, 2023. "Factors affecting nonpayment of water service by rural households in Nepal," Utilities Policy, Elsevier, vol. 84(C).
    3. Momi Dahan & Udi Nisan, 2020. "Late Payments, Liquidity Constraints and the Mismatch between Due Dates and Paydays," CESifo Working Paper Series 8733, CESifo.

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