Willingness to pay for improved rural domestic water Services: a contingent valuation study of sericho division, Isiolo district

Abstract

This paper employs the contingent valuation method (CVM) to assess the WTP for improved water services. A field survey was carried out in the study area to collect the necessary data. A stratified systematic random sampling was utilized. The CVM design employed a direct bid elicitation approach to capture WTP on a sample of 162 households. The study used both the OLS and probit methods in estimation. The results show that there is an overwhelming WTP for improved water services despite the high-poverty level in the area. The willingness to pay was significantly influenced by household income, education levels and distance to water sources. Other socio-economic and demographic factors such as the household size, age, gender and marital status were less significant. Using the direct bid method, the study reveals that the individual average monthly WTP is Kshs 92.40. This is 19% of the individual's average monthly income. When this is aggregated across households in the study area it gives an economic value of Kshs 2.04 million a year. The high valuation of water services improvement by households implies that water user charges should be imposed. Further, the government should prioritize poverty reduction to improve the income given the strong correlation between willingness to pay and household income.