Willingness to pay for the water supply service in Cape Verde - How far can it go?

Abstract

Cape Verde is an African country where consumers pay one of the highest tariffs for water supply services in the world. However, the current levels of service coverage and quality are still far from adequate, as acknowledged by local authorities and international agencies. Thus, an assessment of how much Cape Verdean households are willing to pay (WTP) for service improvements is a fundamental ingredient informing sector policy formulation going forward. This is the focus of this study. Valuation functions were estimated using suitable estimation methods. The results show that, taking into consideration their current levels of expenditure with this service, households would in general not be WTP more for significant improvements in their current water supply services, and that household income and the age of the head of the household both have significant effects on their WTP.