Assessment of household's willingness to pay for improved water supply services in emerging nations: a case study of Adama City, Ethiopia

Abstract

Adama City grew rapidly due to its proximity to Addis Ababa, resulting in increased industrial, urban activities, and population growth. However, this expansion has resulted in drinking water shortages, which is a critical community's concern. The aim of this study was to determine households’ willingness to pay (WTP) for improved water supply services in Adama, with factors influencing WTP. To quantify households’ WTP, a contingent valuation (CV) technique was used and data from 435 respondents was gathered through field surveys, KII, and HHs interviews. A binary logistic model was utilized in the study to examine variables that have a significant impact on households’ WTP. The analysis revealed several independent variables, such as gender, age, marital status, education level, and monthly income, additionally, water quantity, quality, availability, and affordability. The study found that 39.77 and 26.21% of residents of the city were dissatisfied with the quality and quantity of available water supply, respectively. The study discovered that 92% of households were willing to pay an additional $7.26 USD above their average monthly water cost of $3.58 USD to improve water delivery services. Factors that influence households’ WTP for improved water supply services should be considered. Study's findings can help legislators and water supply companies to design sustainable projects that meet community needs.