HOUSE HOLD’S WILLINGNESS TO PAY FOR IMPROVED WATER SERVICE PROVISION IN ETHIOPIA: THE CASE OF ADIARKAY WOREDA

Abstract

Like in many other rural areas in Ethiopia, people in rural areas of Adiarkay woreda use water from low quality and insufficient source. To improve this low level of water service in rural areas requires a substantial resource commitment and the primary target of government policies. Hence, the affordability and willingness of the consumers that are supposed to be served need to be examined. The primary objective of this study is to estimate willingness to pay (WTP) of rural households for improved water service provision and identify its determinant by employing contingent valuation method in Adiarqay woreda. The study used a cross-sectional data from 200 randomly selected households from four kebeles (namely Chewber, Adiargay, Abamar and Adiarkay) of Adiarkay woreda through a structured questionnaire, face-to-face personal interviews with double bounded dichotomous choice and open-ended elicitation formats. The study used both descriptive and econometrics analysis. Descriptive statistics such as mean, percentages, minimum and maximum were computed to explain different socio- economic characteristics of the sample households. In the second part econometric issues, more specifically Tobit and seemingly unrelated bivariate probit model have been employed for this study. The result of the study showed that respondents were interested to support the program, The mean willingness to pay for the use of improved water from the double bounded dichotomous question was Birr 1399.68 per year per jerican. On the other hand, the mean willingness to pay from open-ended questions was Birr 849.60 per year per jerican. The result from the Tobit model revealed that education level of the household head, family size, seasonal variation, distance to source are important variables that significantly and positively affect households’ MWTP for the improvement of water services provision where as quality and quantity of current water used found to have a negative and significant effect on the households' MWTP. Since these variables are identified as major determinants of willingness to pay for improved water services. Policy makers, government and non government organizations should take in to account these socioeconomic and demographic characteristics in designing the improved water services. The service providers should take into consideration the quality and distance problems in designing the water system of the rural areas of Adiarqay woreda.