Willingness to pay for improved water supply services in Shoshong, Phaleng ward, Botswana: application of Contingent Valuation Method (CVM)
Developing countries face the mammoth task of providing basic services and infrastructure. Amongst the top services that have provenmost difficult to provide is the provision of water supply. Since many rural people are poor, it is usually assumed that rural water supplies must be financed by the government or by its agencies, as was the case with Botswana before the Water Utilities Cooperation (WUC) take over. However, thegovernment has faced difficulties in maintaining the infrastructure and cost recovery measures have failed, thereby affecting service delivery.Governments’ efforts to solve water problems have in the past been supply driven. They mostly focused on damming, drilling and diverting water, which proved to bea short term solution. In the long run, the pipes, dams and all infrastructures need maintenances, which most governments fail to carry out owing to financial constraints.To address these problems, the demand side for the value attached to water should be well understood. It is now widely recognised that many rural people can and are willing to pay for improved water supplies and that sustaining and extending services depend on mobilizing their Willingness to Pay (WTP).The pricing of water is the key component to providing an appropriate incentive for sustainable investments.In this way, it is hoped thatan optimum price which reflects household’s WTP and which can be used as a strategy for cost recovery be established. This study used the Contingent Valuation Method (CVM) to analyze the willingness to pay for improved water supply services in Phaleng ward, Shoshong.This study had three objectives, namely to quantify the WTP for improved water supply services by Shoshong residents; to examine the determinants of willingness to pay for these services; and to estimate avoidance expenditure. Data used was collected from households in Phaleng ward using a contingent valuation methodsurvey, and analysis was done using ordinary least squares (OLS), Chi square and descriptive statistics. Results from OLS compare favorably with empirical findings from other studies.Variables such as education level, family size, and income were significant and positive.The volume of water consumed and gender of the respondents were significant but negative. Other variables (Avoidance expenditure and BILL) were not significant. Assuming that the WTP for the sampled households can be generalized for the entire population of the ward and of the village, mean WTP for Phaleng ward and total willingness to pay (TWP) werecalculated to be BWP31.38 per household per month in addition to what they are currently paying and BWP39, 664.32 per month respectively.Using bivariate cross tabulation and Chi square test, analysis was carried out betweenwillingness to payand the socio economic and demographic aspects including some variables that were not included under ordinary least square was done. Results indicate that age and the amount of water consumed in a month (volume) were significant at 5 percent level. Income, gender, and level of education (tertiary and no formal education) were significant at 10 percent level. The study recommends that an intensive publicity campaign to educate people about the benefits associated with the need to pay for an improved water services is a necessary and sufficient condition for the sustainability of the resources. This recommendation is made in the light of the strong positive relationship between education level andwillingness to pay by households.
SubjectContingent valuation method
willingness to pay
improved water service
Botswana water services