Contingent valuation and rural potable water systems: A critical look at the past and future

Abstract

Determining the value of environmental goods that impact human populations, such as potable water, is often highly problematic. The all-too-common lack of realistic markets for the provisioning of these goods necessitates the use of nonmarket valuation techniques. Contingent valuation surveys are often an appropriate method, thanks to their ability to value hypothetical changes and nonuse values, and their limited prior data requirements. When properly implemented, contingent valuation surveys can estimate the maximum willingness to pay of surveyed individuals, allowing the value of the environmental good to be accurately measured. An analysis of the extant body of contingent valuation studies of rural potable water systems in developing and emerging countries indicates that rural water consumers are willing to pay, often substantially, for the creation of a potable water system or for improvements to existing system. Studies involving changes to existing potable water system, through improving an existing system for greater reliability or sustainability, showed a high degree of consistency in respondents' willingness to pay estimates as a percentage of income or current water tariff. Higher incomes, higher levels of education and youth, among other characteristics, were found to be positively correlated with higher willingness to pay estimates. Future contingent valuation studies focusing on improving comparability through greater methodological consistency, and addressing the impact of community power dynamics, intercommunal cleavages, and subsidies could be especially productive.