IDEAS home Printed from https://ideas.repec.org/p/ags/aaea25/361201.html
   My bibliography  Save this paper

Determinants of Willingness-to-Pay to Avoid Water Outage under Extreme Weather Events

Author

Listed:
  • Ren, Yongwang
  • Bergtold, Jason
  • Gharib, Mariam
  • Osman, Eliyasu
  • Sutley, Elaina
  • Sharmin, Rumana

Abstract

Households are negatively affected by water outages under the context of more frequent natural disasters, aging water infrastructure, and inadequate investment in upgrading the system. Using choice experiment data and random coefficient model, we estimated Kansas households’ willingness to pay (WTP) to avoid water outages during extreme weather events. The results indicate that the WTP increases with the duration of the water outages at a decreasing rate. The WTP is also higher if the water outage occurred during winter. Furthermore, we find heterogeneous preferences of urban and rural households as the former care more about the time and season when water outages occurred. These findings provide important information and insight for policy makers when making investment decisions on hardening water infrastructure.

Suggested Citation

  • Ren, Yongwang & Bergtold, Jason & Gharib, Mariam & Osman, Eliyasu & Sutley, Elaina & Sharmin, Rumana, 2025. "Determinants of Willingness-to-Pay to Avoid Water Outage under Extreme Weather Events," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 361201, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea25:361201
    DOI: 10.22004/ag.econ.361201
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/361201/files/104509_104541_105300_water_outage_wtp_AAEA_2025.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.361201?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. James I. Price & Patrick R. Lloyd-Smith & Diane P. Dupont & Wiktor L. Adamowicz, 2019. "Floods and Water Service Disruptions: Eliciting Willingness-to-Pay for Public Utility Pricing and Infrastructure Decisions," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(02), pages 1-20, April.
    2. Jia Wang & Jiaoju Ge & Zhifeng Gao, 2018. "Consumers’ Preferences and Derived Willingness-to-Pay for Water Supply Safety Improvement: The Analysis of Pricing and Incentive Strategies," Sustainability, MDPI, vol. 10(6), pages 1-16, May.
    3. Alfred Appiah & Wiktor Adamowicz & Patrick Lloyd-Smith & Diane Dupont, 2019. "Reliability of Drinking Water: Risk Perceptions and Economic Value," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(02), pages 1-27, April.
    4. David Hensher, 2001. "The valuation of commuter travel time savings for car drivers: evaluating alternative model specifications," Transportation, Springer, vol. 28(2), pages 101-118, May.
    5. Alexia Stock & Rachel A. Davidson & James Kendra & V. Nuno Martins & Bradley Ewing & Linda K. Nozick & Kate Starbird & Maggie Leon-Corwin, 2023. "Household impacts of interruption to electric power and water services," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 115(3), pages 2279-2306, February.
    6. Laura O. Taylor & Ronald G. Cummings, 1999. "Unbiased Value Estimates for Environmental Goods: A Cheap Talk Design for the Contingent Valuation Method," American Economic Review, American Economic Association, vol. 89(3), pages 649-665, June.
    7. Carlsson, Fredrik & Martinsson, Peter, 2008. "Does it matter when a power outage occurs? -- A choice experiment study on the willingness to pay to avoid power outages," Energy Economics, Elsevier, vol. 30(3), pages 1232-1245, May.
    8. Solomon Tarfasa & Roy Brouwer, 2013. "Estimation of the public benefits of urban water supply improvements in Ethiopia: a choice experiment," Applied Economics, Taylor & Francis Journals, vol. 45(9), pages 1099-1108, March.
    9. William Vásquez & Dina Franceschi, 2013. "System Reliability and Water Service Decentralization: Investigating Household Preferences in Nicaragua," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(14), pages 4913-4926, November.
    10. 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, , vol. 21(4), pages 1-28, October.
    11. Reichl, Johannes & Schmidthaler, Michael & Schneider, Friedrich, 2013. "The value of supply security: The costs of power outages to Austrian households, firms and the public sector," Energy Economics, Elsevier, vol. 36(C), pages 256-261.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kaczmarski, Jesse I., 2022. "Public support for community microgrid services," Energy Economics, Elsevier, vol. 115(C).
    2. Merk, Christine & Rehdanz, Katrin & Schröder, Carsten, 2019. "How consumers trade off supply security and green electricity: Evidence from Germany and Great Britain," Energy Economics, Elsevier, vol. 84(S1).
    3. Hashemi, Majid, 2021. "The economic value of unsupplied electricity: Evidence from Nepal," Energy Economics, Elsevier, vol. 95(C).
    4. Abdullah, Sabah & Mariel, Petr, 2010. "Choice experiment study on the willingness to pay to improve electricity services," Energy Policy, Elsevier, vol. 38(8), pages 4570-4581, August.
    5. Tensay Hadush Meles & Razack Lokina & Erica Louis Mtenga & Julieth Julius Tibanywana, 2023. "Stated Preferences with Survey Consequentiality and Outcome Uncertainty: A Split Sample Discrete Choice Experiment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 86(4), pages 717-754, December.
    6. repec:zbw:rwirep:0233 is not listed on IDEAS
    7. Carlsson, Fredrik & Demeke, Eyoual & Martinsson, Peter & Tesemma, Tewodros, 2020. "Cost of power outages for manufacturing firms in Ethiopia: A stated preference study," Energy Economics, Elsevier, vol. 88(C).
    8. Botelho, Vinícius, 2019. "Estimating the economic impacts of power supply interruptions," Energy Economics, Elsevier, vol. 80(C), pages 983-994.
    9. Rehdanz, Katrin & Schröder, Carsten & Narita, Daiju & Okubo, Toshihiro, 2017. "Public preferences for alternative electricity mixes in post-Fukushima Japan," Energy Economics, Elsevier, vol. 65(C), pages 262-270.
    10. Richard S. J. Tol, 2023. "Navigating the energy trilemma during geopolitical and environmental crises," Papers 2301.07671, arXiv.org.
    11. Wolf, André & Wenzel, Lars, 2015. "Welfare implications of power rationing: An application to Germany," Energy, Elsevier, vol. 84(C), pages 53-62.
    12. Broberg, Thomas & Persson, Lars, 2016. "Is our everyday comfort for sale? Preferences for demand management on the electricity market," Energy Economics, Elsevier, vol. 54(C), pages 24-32.
    13. Majid Hashemi & Glenn P. Jenkins & Roop Jyoti & Aygul Ozbafli, 2018. "Evaluating the Cost to Industry of Electricity Outages," Development Discussion Papers 2018-14, JDI Executive Programs.
    14. Kayo MURAKAMI & Takanori IDA, 2019. "Deregulation and status quo bias: Evidence from stated and revealed switching behaviors in the electricity market in Japan," Discussion papers e-19-001, Graduate School of Economics , Kyoto University.
    15. Bénédicte Rulleau, 2024. "Household preferences for cyber-attack resilient water distribution networks: A latent class analysis of a discrete choice experiment in France," Post-Print hal-04157111, HAL.
    16. Mubashir Qasim & Koji Kotani, 2014. "An empirical analysis of energy shortage in Pakistan," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 21(1), pages 137-166, June.
    17. Taale, Francis & Kyeremeh, Christian, 2016. "Households׳ willingness to pay for reliable electricity services in Ghana," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 280-288.
    18. Jed J. Cohen & Johannes Reichl, 2022. "Comparing Internet and phone survey mode effects across countries and research contexts," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 66(1), pages 44-71, January.
    19. Bajo-Buenestado, Raúl, 2017. "Welfare implications of capacity payments in a price-capped electricity sector: A case study of the Texas market (ERCOT)," Energy Economics, Elsevier, vol. 64(C), pages 272-285.
    20. Elie Bouri & Joseph El Assad, 2016. "The Lebanese Electricity Woes: An Estimation of the Economical Costs of Power Interruptions," Energies, MDPI, vol. 9(8), pages 1-12, July.
    21. Woo, C.K. & Ho, T. & Shiu, A. & Cheng, Y.S. & Horowitz, I. & Wang, J., 2014. "Residential outage cost estimation: Hong Kong," Energy Policy, Elsevier, vol. 72(C), pages 204-210.

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea25:361201. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.