This paper measures the rural households willingness to pay (WTP) for access to public telephone services in Bangladesh and Peru through contingent valuation methods. The development of contingent valuation methods together with the econometric expansion of qualitative response models has permitted an approximation to the consumer surplus in the presence of externalities, public good and information asymmetries. The paper utilizes both parametric and nonparametric estimations that are commonly observed in the literature concerned with the estimation of WTP. The main result of the paper suggest that rural telecommunications projects are welfare enhancing, since households WTP are higher than the prevailing tariff rates. For Peru, households currently pay US$0.14 for local calls and US$ 0.29 for national long distance calls (LDN), while their WTP for a local call varies from US$0.25 to US$0.35, and for a LDN call varies from US$0.33 to US$0.45. For Bangladesh, households WTP for a local call varies from US$0.10 to US$0.26, for a LDN call from US$0.23 to US$0.50, and for an international call from US$0.93 to US$1.35. Meanwhile, they are currently paying US$ 0.03, US$ 0.06 and US$ 0.46 respectively. Despite the fact that the monetary measures of WTP vary depending on measurement methods, the results are consistent for all the parametric and non-parametric measures utilized suggesting that the rural telecommunications projects in Bangladesh and Peru are directly contributing to the improvement of welfare of rural households.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by University of Bonn, Center for Development Research (ZEF) in its series Discussion Papers with number
18758.