Willingness to Pay and Inclusive Tariff Designs for Improved Water Supply Services in Khulna, Bangladesh

Date: January 2012
Type: Papers and Briefs
Country:
Subject:
Series: South Asia Working Papers
Author: Gunatilake, Herath; Tachiiri, Masayuki

Description

The study investigates willingness to pay (WTP) for improved water supply services in Khulna, Bangladesh applying the contingent valuation method in a survey of 3,000 households. Mean WTP is large enough to justify the Khulna Water Supply Project. The median WTP is 3.6% of expenditure of the poorest households and connection charge is an important determinant of inclusiveness. Policy simulations show that poor households are less likely to be connected under a flat rate tariff, and that volumetric tariff is pro-poor. Installment payment of connection charges or inclusion of connection costs in capital investments will significantly improve the inclusiveness of the proposed project.

Contents

  • Abstract
  • Introduction
  • Literature Review
  • Survey and Estimation Models
  • Estimation Results
  • Policy Simulations
  • Conclusion
  • References