Willingness to pay for improved water service: evidence from urban Peru

• Autores: Galarza, Francisco, Carbajal Navarro, Max Arturo, Aguirre Montoya, Julio
• Formato: documento de trabajo
• Fecha de Publicación: 2022
• Institución: Universidad del Pacífico
• Repositorio: UP-Institucional
• Lenguaje: inglés
• OAI Identifier: oai:repositorio.up.edu.pe:11354/3747
• Enlace del recurso: https://hdl.handle.net/11354/3747
• Nivel de acceso: acceso abierto
• Materia: Abastecimiento de agua--Perú; https://purl.org/pe-repo/ocde/ford#5.02.01

We study the willingness to pay (WTP) for a large set of improvements in water service related to water quality, continuity, and securing access for people with no house piped water during the COVID-19 pandemic. Using data from urban Peru, and the contingent valuation method, we estimate a mean WTP of around PEN 4.3 (USD 1.05), 3.7 and 1.8, respectively, for the aforementioned sets of improvements, with the combined WTP representing a 23% increase in the households’ water service monthly bill. We find that the WTP for all sets of improvements is influenced by the expenditure in bottled water (which acts as a substitute for tap water) and a proxy variable for household assets. The influence of the individual characteristics typically scrutinized by the literature (e.g. sex, age, and education) varies with the type of improvement examined. We find a significant heterogeneity in WTP across providers and calculate the users’ contribution to a water fund that could crowd-in the public investment in water infrastructure.