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


Hatton MacDonald, D and Morrison, MD and Barnes, MB, Willingness to Pay and Willingness to Accept Compensation for Changes in Urban Water Customer Service Standards, Water Resources Management, 24, (12) pp. 3145-3158. ISSN 0920-4741 (2010) [Refereed Article]

Copyright Statement

Copyright 2010 Springer Science+Business Media B.V.

DOI: doi:10.1007/s11269-010-9599-7


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.

Item Details

Item Type:Refereed Article
Keywords:Choice modelling Price of water Urban water Willingness to accept
Research Division:Economics
Research Group:Applied economics
Research Field:Environment and resource economics
Objective Division:Environmental Policy, Climate Change and Natural Hazards
Objective Group:Environmental policy, legislation and standards
Objective Field:Environmental protection frameworks (incl. economic incentives)
UTAS Author:Hatton MacDonald, D (Professor Darla Hatton MacDonald)
ID Code:103263
Year Published:2010
Web of Science® Times Cited:36
Deposited By:Faculty of Business
Deposited On:2015-09-30
Last Modified:2015-11-05

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