Willingness to Pay and Willingness to Accept Compensation for Changes in Urban Water Customer Service Standards
In this paper, we explore the use of choice modelling for obtaining implicit prices for attributes associated with changes in the reliability of household water services. While not often estimated in practice, the collection of information about willingness to accept compensation is relevant for utilities as customers often have implicit or explicit property rights for particular levels of customer service. Given ageing infrastructure in many cities, maintaining customer service standards requires large capital expenditures. It may be more economically efficient to allow standards to decline in some areas and compensate consumers. Therefore it is useful to understand the value of attributes of water service provision using willingness to accept and how this differs from willingness to pay. We therefore estimate both willingness to accept and willingness to pay measures, and find that respondents value a larger range of attributes using the willingness to accept approach. Copyright Springer Science+Business Media B.V. 2010
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 24 (2010)
Issue (Month): 12 (September)
|Contact details of provider:|| Web page: http://www.springer.com/economics/journal/11269|
|Order Information:||Web: http://link.springer.de/orders.htm|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bunch, David S., 1991. "Estimability in the multinomial probit model," Transportation Research Part B: Methodological, Elsevier, vol. 25(1), pages 1-12, February.
- Shogren, Jason F. & Shin, Seung Youll & Hayes, Dermot J. & Kliebenstein, James, 1994.
"Resolving Differences in Willingness to Pay and Willingness to Accept,"
Staff General Research Papers
701, Iowa State University, Department of Economics.
- Shogren, Jason F. & Seung Y. Shin & Dermot J. Hayes & James B. Kliebenstein, 1994. "Resolving Differences in Willingness to Pay and Willingness to Accept," American Economic Review, American Economic Association, vol. 84(1), pages 255-70, March.
- Mark Morrison & Craig Nalder, 2009. "Willingness to Pay for Improved Quality of Electricity Supply Across Business Type and Location," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 117-134.
- Hanemann, W Michael, 1991. "Willingness to Pay and Willingness to Accept: How Much Can They Differ?," American Economic Review, American Economic Association, vol. 81(3), pages 635-47, June.
- 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, International Association for Energy Economics, vol. 0(Number 4), pages 1-28.
- Train,Kenneth E., 2009.
"Discrete Choice Methods with Simulation,"
Cambridge University Press, number 9780521747387, October.
- Bunch, David S., 1991. "Estimability in the Multinomial Probit Model," University of California Transportation Center, Working Papers qt1gf1t128, University of California Transportation Center.
- Bateman, Ian J, et al, 1997. "A Test of the Theory of Reference-Dependent Preferences," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 479-505, May.
- Joseph C. Cooper, 2003.
"A Joint Framework for Analysis of Agri-Environmental Payment Programs,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 85(4), pages 976-987.
- Cooper, Joseph C., 2001. "A Joint Framework for Analysis of Agri-Environmental Payment Programs," 2001 Annual meeting, August 5-8, Chicago, IL 20493, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Randall, Alan & Stoll, John R, 1980. "Consumer's Surplus in Commodity Space," American Economic Review, American Economic Association, vol. 70(3), pages 449-55, June.
- Hausman, Jerry A & Wise, David A, 1978.
"A Conditional Probit Model for Qualitative Choice: Discrete Decisions Recognizing Interdependence and Heterogeneous Preferences,"
Econometric Society, vol. 46(2), pages 403-26, March.
- J. A. Hausman & D. A. Wise, 1976. "A Conditional Profit Model for Qualitative Choice: Discrete Decisions Recognizing Interdependence and Heterogeneous Preferences," Working papers 173, Massachusetts Institute of Technology (MIT), Department of Economics.
- Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1990. "Experimental Tests of the Endowment Effect and the Coase Theorem," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1325-48, December.
- Mark Morrison & Jeff Bennett & Russell Blamey & Jordan Louviere, 2002. "Choice Modeling and Tests of Benefit Transfer," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(1), pages 161-170.
- Horowitz, John K. & McConnell, Kenneth E., 2002. "A Review of WTA/WTP Studies," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 426-447, November.
- Heng Z. Chen & Stephen R. Cosslett, 1998. "Environmental Quality Preference and Benefit Estimation in Multinomial Probit Models: A Simulation Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 512-520.
- Rowe, Robert D. & D'Arge, Ralph C. & Brookshire, David S., 1980. "An experiment on the economic value of visibility," Journal of Environmental Economics and Management, Elsevier, vol. 7(1), pages 1-19, March.
- Charles R. Plott & Kathryn Zeiler, 2007. "Exchange Asymmetries Incorrectly Interpreted as Evidence of Endowment Effect Theory and Prospect Theory?," American Economic Review, American Economic Association, vol. 97(4), pages 1449-1466, September.
- M. Genius & E. Hatzaki & E. Kouromichelaki & G. Kouvakis & S. Nikiforaki & K. Tsagarakis, 2008. "Evaluating Consumers’ Willingness to Pay for Improved Potable Water Quality and Quantity," Water Resources Management, Springer, vol. 22(12), pages 1825-1834, December.
- Tversky, Amos & Kahneman, Daniel, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1039-61, November.
- Karen Gerard & Marian Shanahan & Jordan Louviere, 2003. "Using stated preference discrete choice modelling to inform health care decision-making: A pilot study of breast screening participation," Applied Economics, Taylor & Francis Journals, vol. 35(9), pages 1073-1085.
When requesting a correction, please mention this item's handle: RePEc:spr:waterr:v:24:y:2010:i:12:p:3145-3158. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Christopher F Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.