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USING A CHOICE Using a Choice Modelling Approach for Customer Service Standards in Urban Water


Hatton MacDonald, D and Barnes, M and Bennet, J and Morrison, M and Young, M, USING A CHOICE Using a Choice Modelling Approach for Customer Service Standards in Urban Water, Journal of the American Water Resources Association, 41, (3) pp. 719-728. ISSN 1752-1688 (2005) [Refereed Article]


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 Details

Item Type:Refereed Article
Research Division:Economics
Research Group:Applied Economics
Research Field:Environment and Resource Economics
Objective Division:Environment
Objective Group:Environmental and Natural Resource Evaluation
Objective Field:Economic Incentives for Environmental Protection
UTAS Author:Hatton MacDonald, D (Associate Professor Darla Hatton MacDonald)
ID Code:103286
Year Published:2005
Deposited By:Faculty of Business
Deposited On:2015-10-01
Last Modified:2015-11-05

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