Abstract:
Electricity service is a very essential commodity for residential, social, commercial, as
well as industrial and it also essential for economic growth. The objectives of this study
were to assess urban households’ willingness to pay for electricity use in Anchar
Woreda. In the study area unable to get continuous and high-quality electricity services.
In this study, two sample kebeles that have electric access were selected purposively and
239 sample households were selected using random sampling technique. The primary
data were collected by face to face interview and various documents were reviewed to get
secondary data. Double bounded dichotomous choices with follow-up open-ended
questions of contingent valuation methods were employed to elicit urban household’s
willingness to pay for electricity use. Both descriptive and econometrics models were
used for the analysis. Bivariate probit and seemingly unrelated bivariate probit models
were used to identify factors affected and to estimate means the household’s willingness
to pay for electricity use, respectively. The results of the bivariate probit model showed
that household income and educational level had positive and significant effects while the
bid price and reliability of the current electricity supply had a negatively and significant
effect on willingness to pay for electricity use. On the other hand, the result of the
seemingly unrelated bivariate probit model from double bounded dichotomous showed
that households’ mean willingness to pay 5.966 ETB per kWh for electricity use, while
the open-ended format was to be 5.42 ETB per kWh. The results of the contingent
valuation method show that all of the sample household’s heads have a willingness to
pay for electricity use. The Government should make efficiency plan invest on
infrastructure in the power sector and improvement electricity tariffs more than paying
now if they will be provided improved electricity services and other concerned bodies
should give attention to better expand awareness of the electricity uses.
