Domestic water pricing with household surveys : a study of acceptability and willingness to pay in Chongqing, China
AbstractIn determining domestic water prices, policy makers often need to use information about the demand side rather than only relying on information about the supply side. Household surveys have frequently been employed to collect demand-side information. This paper presents a multiple bounded discrete choice household survey model. It discusses how the model can be utilized to collect and analyze information about the acceptability of different water prices by different types of households, as well as households'willingness to pay for water service improvement. The results obtained from these surveys can be directly utilized in the development of water pricing and subsidy policies. The paper also presents an empirical multiple bounded discrete choice study conducted in Chongqing, China. In this case, domestic water service quality was seriously inadequate, but financial resources were insufficient to improve service quality. With a survey of about 1,500 households in five suburban districts in Chongqing Municipality, this study shows that a significant increase in the water price is feasible as long as the poorest households can be properly subsidized and certain public awareness and accountability campaigns can be conducted to make the price increase more acceptable to the public. The analysis also indicates that the order in which hypothetical prices are presented to respondents systematically affects their answers, and should be taken into account when designing survey instruments.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 4690.
Date of creation: 01 Aug 2008
Date of revision:
Town Water Supply and Sanitation; Water Supply and Sanitation Governance and Institutions; Environmental Economics&Policies; Water and Industry; Water Supply and Systems;
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-09-13 (Agricultural Economics)
- NEP-ALL-2008-09-13 (All new papers)
- NEP-CNA-2008-09-13 (China)
- NEP-DEV-2008-09-13 (Development)
- NEP-ENV-2008-09-13 (Environmental Economics)
- NEP-TRA-2008-09-13 (Transition Economics)
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