Willingness to pay for improved water supply service in coastal urban settings: evidence from Khulna, Bangladesh

The provision of clean water and sanitation has been one of the challenging goals of the Sustainable Development Goals (SDGs) for developing countries like Bangladesh. The southern cities of the country confront the scarcity of fresh and improved water for drinking and sanitation. The study aims to investigate the demand for improved water service among city dwellers and the potential revenue for the water supply authority. The study surveyed 100 households in Khulna city by administering a simple random sampling method. The single-bounded dichotomous choice contingent valuation method revealed that years of schooling, household income, and excessive time in water collection positively affect willingness to pay (WTP) for improved water service. The households are willing to pay US$ 5.05 per month on average for enjoying improved water service, which in turn produces annual revenues of US$ 4.26 million, overriding the current level of revenue by 2.5 times. Additionally, the water supply authority is incurring around US$ 2.14 million of revenue loss annually which can be recovered by supplying improved water to the city households. This study suggests that the government may be able to address the fresh and improved water scarcity in the urban territory by capturing and utilizing the potential revenue efficiently through removing the structural barriers.