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

Darla Hatton Macdonald, Mark D. Morrison, Mary B. Barnes

Research output: Contribution to journalArticlepeer-review

32 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)3145-3158
Number of pages14
JournalWater Resources Management
Volume24
Issue number12
DOIs
Publication statusPublished - Sep 2010
Externally publishedYes

Keywords

  • choice modelling
  • price of water
  • urban water
  • willingness to pay
  • Urban water
  • Price of water
  • Choice modelling
  • Willingness to accept compensation
  • Willingness to pay

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