Factors determining household consumer’s willingness to pay for water consumption in Malaysia

Abstract

Since Malaysia’s most recent water reform exercise, the issue on whether Malaysian public (households) would be willing to pay for possible new water tariff in return for services provided for them has arisen. This study investigates whether taste, filtered water, color, water contamination, drinkable tap water, customer services, uninterrupted water supply and income determine Malaysian consumer’s willingness to pay (WTP) for their household water consumption. A survey was carried out on more than 262 representing households who are also paid domestic water customers. Multiple regression analyses results showed that only four from the eight factors examined were significant and acted as determinants to WTP. These are taste, uninterrupted water supply, water contamination and income. The study also found that majority of household consumers is only willing to pay for an increase of not more than RM5 from their current water bill. The findings provide an insight particularly for the government and water services providers in Malaysia on factors that they should consider when planning for any water tariff increase.