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Sustainable Policy for Water Pricing in Kuwait

Author

Listed:
  • Ali Aljamal

    (College of Business and Economics, American University of Kuwait, Salmiya 24795, Kuwait)

  • Mark Speece

    (College of Management, Mahidol University, Bangkok 10400, Thailand)

  • Mohsen Bagnied

    (College of Business and Economics, American University of Kuwait, Salmiya 24795, Kuwait)

Abstract

This research investigates consumer willingness to pay (WTP) for water in Kuwait as a foundation for policy decisions on reducing water subsidies. Heavy subsidies have encouraged unsustainable very high consumption, but efforts to cut subsidies can generate strong political opposition. A survey ( n = 443) indicates that WTP is greater at lower prices, but resistance is not purely about price. The presence of a continued partial water subsidy for basic household use slightly increases WTP, probably mainly from perceptions of fairness. Information about Kuwait’s water scarcity also has a small impact. All of these effect sizes are small, so we discuss these issues using a nudge framework from behavioral economics. A number of policies can foster small shifts in WTP; collectively they may have larger impact and make subsidy reduction relatively painless.

Suggested Citation

  • Ali Aljamal & Mark Speece & Mohsen Bagnied, 2020. "Sustainable Policy for Water Pricing in Kuwait," Sustainability, MDPI, vol. 12(8), pages 1-18, April.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:8:p:3257-:d:346695
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    References listed on IDEAS

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