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Water Supply Security and Willingness to Pay to Avoid Drought Restrictions

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  • DAVID HENSHER
  • NINA SHORE
  • KENNETH TRAIN

Abstract

This paper studies Canberra households' and businesses' willingness to pay (WTP) to avoid drought water restrictions, using stated choice experiments. We find that customers evidence a lack of WTP to avoid most types of drought‐induced restrictions. Respondents appear unwilling to pay to avoid low‐level restrictions at all and to avoid higher levels of restrictions that are not in place every day. Given the option of watering on alternative days, customers appear willing to adjust their watering schedules compared with paying higher water bills and appear willing to tolerate high‐level restrictions for limited periods each year, compared with higher water bills.

Suggested Citation

  • David Hensher & Nina Shore & Kenneth Train, 2006. "Water Supply Security and Willingness to Pay to Avoid Drought Restrictions," The Economic Record, The Economic Society of Australia, vol. 82(256), pages 56-66, March.
    • Handle: RePEc:bla:ecorec:v:82:y:2006:i:256:p:56-66
    DOI: 10.1111/j.1475-4932.2006.00293.x
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    References listed on IDEAS

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    1. Ronald C. Griffin & James W. Mjelde, 2000. "Valuing Water Supply Reliability," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 414-426.
    2. David Hensher & Nina Shore & Kenneth Train, 2005. "Households’ Willingness to Pay for Water Service Attributes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(4), pages 509-531, December.
    3. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, November.
    4. Andrew A. Goett & Kathleen Hudson & Kenneth E. Train, 2000. "Customers' Choice Among Retail Energy Suppliers: The Willingness-to-Pay for Service Attributes," The Energy Journal, , vol. 21(4), pages 1-28, October.
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