Willingness to pay for improved water supply services in Shoshong, Phaleng ward, Botswana: application of Contingent Valuation Method (CVM)

Type Thesis or Dissertation - Master of Science Degree in Integrated Water Resources Management
Title Willingness to pay for improved water supply services in Shoshong, Phaleng ward, Botswana: application of Contingent Valuation Method (CVM)
Publication (Day/Month/Year) 2013
URL http://ir.uz.ac.zw/xmlui/bitstream/handle/10646/1388/UZ_IWRM_Kadisa_2013_Final Msc​thesi.pdf?sequence=1&isAllowed=y
Developing countries face the mammoth task of providing basic services and infrastructure.
Amongst the top services that have proven most 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, the government 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 be a 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 that an 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 method survey, 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) were calculated 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
between willingness to pay and 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 and willingness to pay by

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