A series of reforms in the water industry in Australia has created a demand from the industry and regulators for objective methodologies to evaluate incremental changes in the customer service standards. In this paper, the use of choice modeling for estimating implicit prices associated with urban water supply attributes is explored. Results from multinomial logit (MNL) and random parameters logit (RPL) models show that increases in annual water bills and the frequency of future interruptions were the most important attributes. Implicit price confidence intervals based on the best models suggest that people are willing to pay positive amounts to achieve a water supply that is less frequently interrupted. The provision of alternative water supplies during an interruption and notification of the interruption were found to be unimportant to respondents. Choice modeling proved to be a useful technique and provided the industry and regulators with additional information for standard setting.

Item Type:	Refereed Article
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:	103286
Year Published:	2005
Web of Science® Times Cited:	13
Deposited By:	Faculty of Business
Deposited On:	2015-10-01
Last Modified:	2015-11-05
Downloads:	0