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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.

Suggested Citation

  • 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. 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.
    3. 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," ADB Economics Working Paper Series 201, Asian Development Bank.
    4. Wang , Hua & He, Jie & Kim, Yoonhee & Kamata, Takuya, 2011. "Municipal solid waste management in small towns : an economic analysis conducted in Yunnan, China," Policy Research Working Paper Series 5767, The World Bank.
    5. 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.
    6. 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.
    7. 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.
    8. Zhang, Xiaohong & Qi, Yan & Wang, Yanqing & Wu, Jun & Lin, Lili & Peng, Hong & Qi, Hui & Yu, Xiaoyu & Zhang, Yanzong, 2016. "Effect of the tap water supply system on China's economy and energy consumption, and its emissions’ impact," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 660-671.
    9. 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.
    10. 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.
    11. 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'Economique de l'École de gestion à l'Université de Sherbrooke.
    12. 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.
    13. Ayoub, Hassan & kertous, Mourad, 2015. "Analyse Du Consentement À Payer Des Ménages Pour Améliorer La Qualite Du Service En Eau Potable : Cas Du Liban
      [Analysis Of Willingness To Pay Households To Improve The Quality Of Drinking Water Se
      ," MPRA Paper 65986, University Library of Munich, Germany.

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