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.
History
Publication title
Water Resources Management
Volume
24
Issue
12
Pagination
3145-3158
ISSN
0920-4741
Department/School
College Office - College of Business and Economics
Publisher
Springer Netherlands
Place of publication
Netherlands
Rights statement
Copyright 2010 Springer Science+Business Media B.V.