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Assessment of the Impact on Household Welfare of Pressurized Potable Water Supply in Northern Cyprus

Author

Listed:
  • Arif Yurtsev

    (Economist,Cambridge Resource International Inc.)

  • Glenn P. Jenkins

    (Department of Economics, Queen's University, Kingston, Canada and Eastern Mediterranean University, North Cyprus)

Abstract

This paper first contains an estimation of the willingness to pay by for reliable potable water supply of households in a situation where a public water supply is available but the quality of the service is such that the water is neither reliable nor potable. This is a problem that plagues millions of households living cities in both low and middle income countries. The analysis is carried out by measuring the averting expenditures undertaken by households. Second, a cost-benefit analysis is conducted in order to measure the net benefit gained by households from investments to upgrade the existing municipal water distribution systems in Northern Cyprus so that it would be able to continuously deliver potable water to all households. It is found that average willingness to pay for reliable water supply is 22.4 TL/m3 (3.73 Euro/m3). On the basis of the economic cost-benefit analysis, we find that present value of total economic benefits of households are six times of the total investment costs of replacing all the water distribution system within the city of Famagusta. The present value of the net benefit per household is on average 23,644 TL (3,940 Euro). Each year, every household is losing 2,500 TL (416 Euro) if the completing of the rehabilitation is delayed.

Suggested Citation

  • Arif Yurtsev & Glenn P. Jenkins, 2019. "Assessment of the Impact on Household Welfare of Pressurized Potable Water Supply in Northern Cyprus," Development Discussion Papers 2019-03, JDI Executive Programs.
    • Handle: RePEc:qed:dpaper:4513
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    References listed on IDEAS

    as
    1. Pei-Ing Wu & Chu-Li Huang, 2001. "Actual averting expenditure versus stated willingness to pay," Applied Economics, Taylor & Francis Journals, vol. 33(2), pages 277-283.
    2. Hasan Bicak & Glenn Jenkins, 1999. "Costs And Pricing Policies Related To Transporting Water By Tanker From Turkey To North Cyprus," Development Discussion Papers 1999-07, JDI Executive Programs.
    3. Ozbafli, Aygul & Jenkins, Glenn P., 2016. "Estimating the willingness to pay for reliable electricity supply: A choice experiment study," Energy Economics, Elsevier, vol. 56(C), pages 443-452.
    4. Sezai, I. & Aldabbagh, L.B.Y. & Atikol, U. & Hacisevki, H., 2005. "Performance improvement by using dual heaters in a storage-type domestic electric water-heater," Applied Energy, Elsevier, vol. 81(3), pages 291-305, July.
    5. Yurtsev, Arif & Jenkins, Glenn P., 2016. "Cost-effectiveness analysis of alternative water heater systems operating with unreliable water supplies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 174-183.
    6. Chirodip Majumdar & Gautam Gupta, 2009. "The Economic Losses Due to Drinking Water Impurity: A Revealed Preference Analysis in Kolkata, India," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 44(1), pages 125-142, July.
    7. Charles W. Abdalla & Brian A. Roach & Donald J. Epp, 1992. "Valuing Environmental Quality Changes Using Averting Expenditures: An Application to Groundwater Contamination," Land Economics, University of Wisconsin Press, vol. 68(2), pages 163-169.
    8. Bryan J. Hubbell & Jeffrey L. Jordan, 2000. "Joint Production and Averting Expenditure Measures of Willingness to Pay: Do Water Expenditures Really Measure Avoidance Costs?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 427-437.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Willingness to pay; cost-benefit analysis; water supply project; North Cyprus.;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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