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Water pricing with household surveys: A study of acceptability and willingness to pay in Chongqing, China

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  • Wang, Hua
  • Xie, Jian
  • Li, Honglin

Abstract

In determining domestic water prices, policy makers frequently need to use demand-side information rather than only rely on supply-side data as previously did, and household surveys are often conducted to collect information on the demand side. This paper presents a multiple bounded discrete choice (MBDC) survey model for collecting information about acceptability of different water prices by different types of households and estimating households' willingness to pay for water service improvement. The results obtained from MBDC surveys can be directly utilized in the development of water pricing and subsidy policies. An empirical MBDC study is conducted in Chongqing, China, where domestic water service quality was seriously inadequate, but financial resources were insufficient to improve the service quality. With a survey of 1500 households in five suburban districts in Chongqing Municipality, this study shows that a significant increase in water price is economically feasible as long as the poorest households are properly subsidized. The analysis also indicates that the order in which hypothetical prices are presented to the respondents with the MBDC method can systematically affect the answers and should be taken into account when designing such survey instruments.

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  • Wang, Hua & Xie, Jian & Li, Honglin, 2010. "Water pricing with household surveys: A study of acceptability and willingness to pay in Chongqing, China," China Economic Review, Elsevier, vol. 21(1), pages 136-149, March.
    • Handle: RePEc:eee:chieco:v:21:y:2010:i:1:p:136-149
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    2. Zhang, Fan & Fogarty, James, 2015. "Nonmarket Valuation of Water Sensitive Cities: Current Knowledge and Issues," Working Papers 207694, University of Western Australia, School of Agricultural and Resource Economics.
    3. Van Houtven, George L. & Pattanayak, Subhrendu K. & Usmani, Faraz & Yang, Jui-Chen, 2017. "What are Households Willing to Pay for Improved Water Access? Results from a Meta-Analysis," Ecological Economics, Elsevier, vol. 136(C), pages 126-135.
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    5. Jiang, Yi & Jin, Leshan & Lin, Tun, 2010. "Higher water tariffs for less river pollution—evidence from Min River and Fuzhou City, People’s Republic of China," MPRA Paper 24992, University Library of Munich, Germany.
    6. Martins, Rita & Quintal, Carlota & Cruz, Luís & Barata, Eduardo, 2016. "Water affordability issues in developed countries – The relevance of micro approaches," Utilities Policy, Elsevier, vol. 43(PA), pages 117-123.
    7. Kiprop, Jonah Kipsaat, 2015. "An Evaluation Of Farmers Willingness To Pay For Irrigation Water In Kerio Valley Basin Kenya," Research Theses 265580, Collaborative Masters Program in Agricultural and Applied Economics.
    8. Salvador Saz-Salazar & Miguel A. García-Rubio & Francisco González-Gómez & Andrés J. Picazo-Tadeo, 2016. "Managing Water Resources Under Conditions of Scarcity: On Consumers’ Willingness to Pay for Improving Water Supply Infrastructure," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(5), pages 1723-1738, March.
    9. Marius Yapo & Jie He & Bruno Gagnon & Luc Savard & Roland Leduc, 2015. "La valeur économique pour l’amélioration de la qualité de l’eau: le cas de la rivière Magog et du lac Magog (Québec, Canada)," Cahiers de recherche 15-15, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    10. Zhang, Xin & Zhang, Xiaobo & Chen, Xi, 2017. "Valuing Air Quality Using Happiness Data: The Case of China," Ecological Economics, Elsevier, vol. 137(C), pages 29-36.
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    12. He, Y.X. & Xia, T. & Liu, Y.Y. & Zhou, L.F. & Zhou, B., 2013. "Residential natural gas price affordability analysis–A case study of Beijing," Renewable and Sustainable Energy Reviews, Elsevier, vol. 28(C), pages 392-399.
    13. Lilia Rodríguez-Tapia & Daniel A. Revollo-Fernández & Jorge A. Morales-Novelo, 2017. "Household’s Perception of Water Quality and Willingness to Pay for Clean Water in Mexico City," Economies, MDPI, vol. 5(2), pages 1-14, April.
    14. Rajapakshe, Sisira & Termansen, Mette & Paavola, Jouni, 2022. "Valuing Water Service Improvements through Revealed Preference: Averting Behaviour Method," MPRA Paper 115623, University Library of Munich, Germany.
    15. Ben Brahim-Neji, Hella & Ruiz-Villaverde, Alberto & González-Gómez, Francisco, 2014. "Decision aid supports for evaluating agricultural water reuse practices in Tunisia: The Cebala perimeter," Agricultural Water Management, Elsevier, vol. 143(C), pages 113-121.
    16. Mohammad Rashid & Debapratim Pandit, 2019. "Analysis of service quality of household toilets expected by households practicing open defecation: a study in rural settlements of Bihar, India," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 21(5), pages 2487-2506, October.
    17. Rakesh Gupta & Kejia Yan & Tarlok Singh & Di Mo, 2020. "Domestic and International Drivers of the Demand for Water Resources in the Context of Water Scarcity: A Cross-Country Study," JRFM, MDPI, vol. 13(11), pages 1-28, October.
    18. Ali Aljamal & Mark Speece & Mohsen Bagnied, 2020. "Sustainable Policy for Water Pricing in Kuwait," Sustainability, MDPI, vol. 12(8), pages 1-18, April.
    19. Massarutto, Antonio, 2020. "Servant of too many masters: Residential water pricing and the challenge of sustainability," Utilities Policy, Elsevier, vol. 63(C).
    20. Kiprop, Jonah Kipsaat, 2015. "An Evaluation Of Farmers Willingness To Pay For Irrigation Water In Kerio Valley Basin Kenya," Research Theses 276443, Collaborative Masters Program in Agricultural and Applied Economics.
    21. Shaojian Chen & Yuanyuan Cao & Jun Li, 2021. "The Effect of Water Rights Trading Policy on Water Resource Utilization Efficiency: Evidence from a Quasi-Natural Experiment in China," Sustainability, MDPI, vol. 13(9), pages 1-17, May.
    22. Francisco González Gómez & Jorge Guardiola & Edna Guidi Gutiérrez, 2012. "Willingness to pay more for water in a climate of confrontation: The case of Sucre, Bolivia," Working Papers. Serie EC 2012-03, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

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