Using a choice experiment to estimate the social benefits from improved water supply services

Abstract

Efficient and sustainable future investments in water infrastructure and improved water services should be based on a thorough understanding of public preferences and values. This paper examines the welfare effects of improved water supply services in a characteristic coastal area, where water policy makers should address both water quality and water quantity problems. A choice experiment method was designed and conducted in order to evaluate public preferences for alternative levels of water supply attributes: i.e. water quality, frequency of water supply interruptions and water availability for agriculture. Primary data were collected using a structured questionnaire from a sample of residents in the study area (Municipality of New Propontida, Greece). The results show a significant willingness to pay (WTP) for drinking water quality improvements and a lower yet important WTP to avoid interruptions in water services. In a cost-benefit framework, those findings may serve as a reference for sustainable water resources planning, aiming at deriving reliable estimates of social benefits from selected water management decisions.