In determining domestic water prices, policy makers often need to use information about the demand side rather than only relying on information about the supply side. Household surveys have frequently been employed to collect demand-side information. This paper presents a multiple bounded discrete choice household survey model. It discusses how the model can be utilized to collect and analyze information about the acceptability of different water prices by different types of households, as well as households' willingness to pay for water service improvement. The results obtained from these surveys can be directly utilized in the development of water pricing and subsidy policies. The paper also presents an empirical multiple bounded discrete choice study conducted in Chongqing, China. In this case, domestic water service quality was seriously inadequate, but financial resources were insufficient to improve service quality. With a survey of about 1,500 households in five suburban districts in Chongqing Municipality, this study shows that a significant increase in the water price is feasible as long as the poorest households can be properly subsidized and certain public awareness and accountability campaigns can be conducted to make the price increase more acceptable to the public. The analysis also indicates that the order in which hypothetical prices are presented to respondents systematically affects their answers, and should be taken into account when designing survey instruments.
Details
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Author
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Document Date
2008/08/01
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Document Type
Policy Research Working Paper
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Report Number
WPS4690
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2010/07/01
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Disclosure Status
Disclosed
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Doc Name
Domestic water pricing with household surveys : a study of acceptability and willingness to pay in Chongqing, China
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Keywords
water price;water service;Water Services;low income group;access to safe drinking water;water expenditure;water tariff;household survey;water supply service;wastewater treatment;concern of policy makers;municipal water supply system;domestic water;domestic water service;domestic water price;household water supply;pricing mechanism;marginal cost pricing;water tariff adjustment;household water pricing;amount of water;availability of water;water supply industry;percentage of income;effect of price;contingent valuation method;water price increase;piped water supply;monthly water use;efficient water pricing;household income;subsidy policy;water resource;Social Welfare;water fee;monthly income;
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Citation
Li,Honglin Wang,Hua Xie,Jian
Domestic water pricing with household surveys : a study of acceptability and willingness to pay in Chongqing, China (English). Policy Research working paper ; no. WPS 4690 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/752931468213924382/Domestic-water-pricing-with-household-surveys-a-study-of-acceptability-and-willingness-to-pay-in-Chongqing-China