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Demand for piped drinking water and a formal sewer system in Bhutan

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  • Ngawang Dendup

    (Waseda University)

  • Kuenzang Tshering

    (Royal University of Bhutan)

Abstract

In this study, we estimate demand for sewage connection and piped drinking water in Bhutan. To estimate household willingness to pay, we use data from a sample of 8968 households surveyed through the Bhutan Living Standard Survey of 2012. A hedonic model is estimated using Heckman two-step procedure to overcome the problem of sample selection bias. On average, households in Thimphu city are willing to pay Nu 452 (USD 7) and Nu 124 (USD 2) per month for piped drinking water connections and sewage, respectively. This translates to 8 and 2% of their monthly household expenditure for water and sewage connection, respectively. The households in Thimphu are willing to pay significantly more than the current joint charge of Nu 78 per month for water and sanitation. There is scope for municipal offices in Bhutan to increase their revenues from public services and to cover potential investment, maintenance and operational costs associated with water and sewage services.

Suggested Citation

  • Ngawang Dendup & Kuenzang Tshering, 2018. "Demand for piped drinking water and a formal sewer system in Bhutan," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 20(3), pages 681-703, July.
    • Handle: RePEc:spr:envpol:v:20:y:2018:i:3:d:10.1007_s10018-018-0211-3
    DOI: 10.1007/s10018-018-0211-3
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    1. William F. Vásquez & Laura Beaudin, 2020. "On the use of hypothetical price data to estimate hedonic models in a developing country context," Letters in Spatial and Resource Sciences, Springer, vol. 13(3), pages 219-231, December.
    2. Sonia Afrin & Mohammed Ziaul Haider & Md. Sariful Islam, 2017. "Optimal use of pesticide for paddy production in the south-west region of Bangladesh," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 6(4), pages 433-457, October.
    3. Leiva, Benjamin & Van Houtven, George & Vásquez, William F. & Nájera, Andrea, 2023. "Valuing water service reliability and in-home water storage: A hedonic price model from Guatemala," Utilities Policy, Elsevier, vol. 82(C).
    4. Sooriyakumar Krishnapillai & Linoja Sajanthan & Sivashankar Sivakumar, 2023. "Households’ willingness to pay for sustainable sanitation and wastewater management in Jaffna municipal area, Sri Lanka," Journal of Environmental Studies and Sciences, Springer;Association of Environmental Studies and Sciences, vol. 13(2), pages 312-320, June.

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    More about this item

    Keywords

    Hedonic; Bhutan; Sewage; Water; WTP; Heckman;
    All these keywords.

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • 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

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