HOUSEHOLDS’ WILLINGNESS TO PAY FOR IMPROVED POTABLE WATER SUPPLY: THE CASE OF BURAYU CITY, OROMIA NATIONAL REGIONAL STATE, ETHIOPIA

Abstract

Access to safe drinking water is a fundamental human need for improving their livelihood and it is an essential input for industry, energy production, and agriculture. However, access to safely managed drinking water remains to be the problem faced by households. The extent to which households contribute in the form of WTP for the proposed water supply improvement is very crucial. Therefore, this research was designed to estimate households mean WTP for improved water supply services and identify the determinant factors. A two-stage sampling technique was used to collect data from 385 randomly selected households using smei-structured questionnaire interviews. A CV method a double-bound dichotomous choice question with a follow-up of open-ended format was used. While a seemingly unrelated bivariate probit model without covariates was used to estimate the mean willingness to pay, the probit model was used to identify the determinant factors for improved water supply service. The result revealed that 47.01% were willing to pay the initially offered bid for improved potable water supply. The mean willingness to pay for improved water supply was found to be 2.50 and 2 birrs per 20 liters for double bound and open-ended formats, respectively. The results of the probit model showed that sex of the household head and initial bids were negatively and significantly related with willingness to pay for improved water supply services while, satisfaction, income and water expenditure were positively and significantly affect willingness to pay. Therefore, policy and program interventions designed to address improved water supply service problems in Burayu city must take into account these significant variables