Contingent Valuation of Lake Rawapening as a Source of Drinking Water

Abstract

The aim of this study is to estimate willingness to pay (WTP) of local residents, by applying the contingent valuation method as a surcharge on their water bill, for a given improvement of lake ecosystem for ensuring the sustainability of freshwater supply in term quantity and quality as demanded by public water utility. The survey was conducted in Semarang regency involving 116 respondents in three villages that received clean water services from Lake Rawapening.  The mean of WTP was estimated to be 6,055.54 rupiahs (0.433 US$) per month for each household, approximately equivalent to 9.26% of the average monthly water bill of the households. The results revealed that younger and educated respondents, households with higher income and with fewer members were, on average, were willing to pay more. This study also demonstrated that households’ ownership of groundwater wells was a hindering factor for contributing to improving lake’s ecosystem. The results of this study can assist decision-makers to understand the public demand for improved Lake Rawapening ecosystem and to formulate better environmental policies.