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Awareness of coping costs and willingness to pay for urban drinking water service: Evidence from Lahore, Pakistan

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  • Hasan, Syed M.
  • Akram, Agha Ali
  • Jeuland, Marc

Abstract

The global population is rapidly urbanizing, increasing pressure on scarce water resources. Lahore, Pakistan, is a case in point, with limited options for increasing water supply to meet booming demand. We ask whether households are willing to pay more cost-reflective tariffs following a simple, randomized information treatment involving calculation of the costs of coping with poor service quality. Treated households are 20 percentage points more likely to acquiesce to increased tariffs for improved service, and median monthly WTP increases 17–18%. A simple verbal procedure can increase acceptance of price increases, offering managers a valuable tool for water demand management.

Suggested Citation

  • Hasan, Syed M. & Akram, Agha Ali & Jeuland, Marc, 2021. "Awareness of coping costs and willingness to pay for urban drinking water service: Evidence from Lahore, Pakistan," Utilities Policy, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:juipol:v:71:y:2021:i:c:s0957178721000801
    DOI: 10.1016/j.jup.2021.101246
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    More about this item

    Keywords

    Information treatment; Contingent valuation; Coping costs; Water pricing; Field experiment; Piped water supply; Pakistan;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

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