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Willingness to Pay and Willingness to Accept Compensation for Changes in Urban Water Customer Service Standards

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  • Darla Hatton MacDonald
  • Mark Morrison
  • Mary Barnes

Abstract

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

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  • Darla Hatton MacDonald & Mark Morrison & Mary Barnes, 2010. "Willingness to Pay and Willingness to Accept Compensation for Changes in Urban Water Customer Service Standards," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 24(12), pages 3145-3158, September.
    • Handle: RePEc:spr:waterr:v:24:y:2010:i:12:p:3145-3158
    DOI: 10.1007/s11269-010-9599-7
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    7. Van Acker, Veronique & Ho, Loan & Stevens, Larissa & Mulley, Corinne, 2020. "Quantifying the effects of childhood and previous residential experiences on the use of public transport," Journal of Transport Geography, Elsevier, vol. 86(C).
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    9. Husnain Haider & Majed Alinizzi & Md. Shafiquzzaman & Saleem S. AlSaleem & Mohammad Alresheedi & Rehan Sadiq, 2022. "Customer-Driven Water Supply Systems: Synergizing System Reliability and Customer Satisfaction with Bowtie Analysis," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 36(10), pages 3481-3503, August.
    10. Li, Guifang & Shi, Minjun & Zhou, Dingyang, 2021. "How much will farmers be compensated for water reallocation from agricultural water to the local ecological sector on the edge of an oasis in the Heihe River Basin?," Agricultural Water Management, Elsevier, vol. 249(C).
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    12. 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.
    13. Ombiono Kitoto, Patrick Arnold, 2014. "Évaluation du consentement à recevoir des agriculteurs pour la restauration du lac Tchad," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 95(4).
    14. Julia Martin‐Ortega & M. Azahara Mesa‐Jurado & Julio Berbel, 2015. "Revisiting the Impact of Order Effects on Sensitivity to Scope: A Contingent Valuation of a Common‐Pool Resource," Journal of Agricultural Economics, Wiley Blackwell, vol. 66(3), pages 705-726, September.
    15. 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.
    16. Alfonso Expósito, 2019. "Valuing Households’ Willingness to Pay for Water Transfers from the Irrigation Sector: A Case Study of the City of Seville (Southern Spain)," Sustainability, MDPI, vol. 11(24), pages 1-18, December.
    17. Olha Halytsia & Maria Vrachioli & Krzysztof Janik & Sławomir Sitek & Grzegorz Wojtal & Anne Imig & Arno Rein & Johannes Sauer, 2022. "Assessing Economic Feasibility of Managed Aquifer Recharge Schemes: Evidence from Cost-benefit Analysis in Poland," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 36(13), pages 5241-5258, October.
    18. Mesa-Jurado, Maria A. & Martin-Ortega, Julia & Ruto, Eric & Berbel, Julio, 2011. "The economic value of guaranteed water supply for irrigation under scarcity conditions," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114650, European Association of Agricultural Economists.

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