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

journal contribution
posted on 2023-05-18, 13:16 authored by Darla Hatton MacDonaldDarla Hatton MacDonald, Barnes, M, Bennet, J, Morrison, M, Young, M
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.

History

Publication title

Journal of the American Water Resources Association

Volume

41

Pagination

719-728

ISSN

1752-1688

Department/School

College Office - College of Business and Economics

Publisher

Wiley-Blackwell Publishing, Inc.

Place of publication

United Kingdom

Repository Status

  • Restricted

Socio-economic Objectives

Environmental protection frameworks (incl. economic incentives)

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