What are Households Willing to Pay for Improved Water Access? Results from a Meta-Analysis
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© 2016Although several factors contribute to low rates of access to improved water and sanitation in the developing world, it is especially important to understand and measure household demand for these services. One valuable source of information regarding demand is the growing empirical literature that has applied stated preference methods to estimate households’ willingness to pay (WTP). Because it is difficult to generalize and support planning based on this scattered literature, we conduct a meta-analysis to take stock of the worldwide sample of household WTP for improved drinking water services. Using 171 WTP estimates drawn from 60 studies, we first describe this sample and then examine the potential factors that explain variation in WTP estimates. Our results suggest that households are willing to pay between approximately $3 and $30 per month for improvements in water access. Specifically, in line with economic theory and intuition, WTP is sensitive to scope (the magnitude of improvement in drinking water services), as well as household income, and stated-preference elicitation method. We demonstrate how our results can be used to predict household-level WTP for selected improvements in drinking water access in regions with low coverage, and find that private benefits exceed the cost of provision.
Published Version (Please cite this version)
Van Houtven, GL, SK Pattanayak, F Usmani and JC Yang (2017). What are Households Willing to Pay for Improved Water Access? Results from a Meta-Analysis. Ecological Economics, 136. pp. 126–135. 10.1016/j.ecolecon.2017.01.023 Retrieved from https://hdl.handle.net/10161/13802.
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Subhrendu K. Pattanayak is the Oak Professor of Environmental and Energy Policy at Duke University. He studies the causes and consequences of human behaviors related to the natural environment to help design and evaluate policy interventions in low-income tropical countries. His research is in three domains at the intersection of environment, development, health and energy: forest ecosystem services, environmental health (diarrhea, malaria, respiratory infections) and household energy transitions. He has focused on design of institutions and policies that are motivated by enormous inequities and a range of efficiency concerns (externalities, public goods and imperfect information and competition).
Dr. Pattanayak approaches these problems through systematic reviews of the literature (meta-analyses) and statistical modeling with high-resolution objective data collected in the field. He then uses those data to test hypotheses salient to policy manipulation, developed both from economic frameworks, stakeholder discussions and direct observations in the field. He employs empirical methods that exploit quasi-experimental variation (or experiments where feasible and appropriate), captured through household, community and institutional surveys. He typically matches these survey data with meso-scale secondary statistics and estimates econometric models to generate policy parameters. Dr. Pattanayak has collaborated closely with multi-lateral agencies, NGOs, governments, and local academics in Brazil, Costa Rica, Ethiopia, India, Indonesia, Mexico, Nepal, Sri Lanka and the U.S.
I am an applied microeconomist, with research interests at the intersection of environmental, energy and development economics. In addition to being a PhD candidate at Duke University, I am a Doctoral Student Fellow at the Duke University Energy Initiative, and a Doctoral Scholar at the Duke Global Health Institute.
More information at: www.farazusmani.com
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