Edited by David Pearce, Corin Pearce and Charles Palmer
Chapter 6: Willingness to pay for improved water quality in Kathmandu
Dirgha N. Tiwari 1 INTRODUCTION The increasing threat posed to human health due to inadequate water supply and increased water pollution in urban centres of South Asian countries has become a matter of growing concern in recent years. Inadequate provision and poor quality of water, on the other hand, impose additional costs to society. Increases in household expenditures due to increased expenditures in treatment of poor water quality and private medical expenses are among such costs. Furthermore, deteriorating environmental quality also demands additional public investments which could impose additional ﬁnancial burdens on the national government and local municipalities. Past studies have indicated that the prevalence of low-equilibrium traps in the water supply systems (WSS) in developing countries is mainly associated with pricing policy and institutional failures (World Bank, 1993a, Tiwari, 1998). The design and implementation of pricing policy reforms play a vital role in improving the ﬁnancial sustainability of water supply systems and in averting human health risks. Eﬀorts towards necessary pricing policy and institutional reforms in developing countries, on the other hand, are also constrained by the lack of necessary information. The contingent valuation (CV) studies have widely been carried out in developing countries in recent years to help decision makers to reform water pricing policies. This method is developed to elicit directly statements of economic value of unpriced natural resources for changes in their quality and quantity and have long been used by the environmental economists to estimate economic beneﬁts for a variety of policies (Mitchell...
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