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The Value of Water Connections in Central American Cities: A Revealed Preference Study


  • NAUGES Céline

    (LERNA, University of Toulouse)

  • STRAND Jon


We estimate annualized values of access to home tap water in three cities in El Salvador, and marginal ‘barrios’ in four Guatemalan cities, using a hedonic price method for studying changes in capitalized home values from obtaining a water connection. A tap water connection is found to add from 10 per cent to 52 per cent to sales values of homes in our sample. The estimated mean values of gaining tap water access represent 1–5 per cent of real household income, differing by city and with generally higher values in El Salvador. On average this gain eliminates between 1 per cent and 3 per cent of the initial difference in real incomes between the groups of connected and unconnected households. We also find large differences in the value of a tap connection depending on the main source of non-tap water, with lowest values when the source is a private well in El Salvador.
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  • NAUGES Céline & STRAND Jon, 2006. "The Value of Water Connections in Central American Cities: A Revealed Preference Study," LERNA Working Papers 06.23.216, LERNA, University of Toulouse.
  • Handle: RePEc:ler:wpaper:06.23.216

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    References listed on IDEAS

    1. Ian Walker & Max Velasquez & Fidel Ordoñez & Florencia Rodriguez, 1997. "Regulation, Organization and Incentives: The Political Economy of Potable Water Services in Honduras," Research Department Publications 3013, Inter-American Development Bank, Research Department.
    2. Kevin J. Boyle & P. Joan Poor & Laura O. Taylor, 1999. "Estimating the Demand for Protecting Freshwater Lakes from Eutrophication," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 1118-1122.
    3. Strand, Jon & Walker, Ian, 2005. "Water markets and demand in Central American cities," Environment and Development Economics, Cambridge University Press, vol. 10(03), pages 313-335, June.
    4. Jon Strand & Mette Vågnes, 2001. "The relationship between property values and railroad proximity: a study based on hedonic prices and real estate brokers' appraisals," Transportation, Springer, vol. 28(2), pages 137-156, May.
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    Cited by:

    1. Strand, Jon, 2012. "Low-level versus high-level equilibrium in public utility services," Journal of Public Economics, Elsevier, vol. 96(1), pages 163-172.
    2. NAUGES Céline & VAN DEN BERG Caroline, 2006. "Water Markets, Demand and Cost Recovery for Piped Water Supply Services: Evidence from Southwest Sri Lanka," LERNA Working Papers 06.08.201, LERNA, University of Toulouse.
    3. Theara Horn, 2011. "Welfare Effects of Access to Water Service in Cambodia," Economics Bulletin, AccessEcon, vol. 31(3), pages 2075-2089.
    4. Johanna Choumert & N. Eric Kéré & Amandine Loyal Laré-Dondarini, 2016. "A Multi-Level Housing Hedonic Analysis of Water and Sanitation Access," Economics Bulletin, AccessEcon, vol. 36(2), pages 1010-1037.
    5. 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.
    6. Pierre-Alexandre Mahieu & Romain Craste & Bengt Kriström & Pere Riera, 2014. "Non-market valuation in France: An overview of the research activity," Working Papers hal-01087365, HAL.
    7. Nauges, Celine & Strand, Jon, 2007. "Estimation of non-tap water demand in Central American cities," Resource and Energy Economics, Elsevier, vol. 29(3), pages 165-182, September.
    8. Vásquez, William F., 2011. "Household preferences and governance of water services: A hedonic analysis from rural Guatemala," IFPRI discussion papers 1152, International Food Policy Research Institute (IFPRI).

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