IMPACT OF PUBLIC WATER SERVICE QUALITY ON HOUSEHOLD WILLINGNESS TO PAY IN ISLAMABAD

Abstract

This study estimates the household willingness to pay for enhanced services of drinking water from public filtration plants in Sector I-10, Islamabad. Using primary data collected from 362 households, we estimate the willingness to pay of the respondents for improved services of public filtration plants using the Contingent Valuation Method (CVM) and employ a binary logit regression model. The findings of this study suggest that 89% of the surveyed households are ready to pay for better services of filtration plants. "The evidence indicates a clear demand for reliable and safe drinking water services. The results also suggest that households' decision of paying for enhanced services of public filtration plants is a function of household income, education level of the household head, number of children in the household, and the household's knowledge about water quality and its related health risks. In addition, it is found that households are dissatisfied with overall water services due to poor management and safety concerns. Even households using bottled water also do not seem to be satisfied with overall water services, perhaps due to a lack of trust. For policy makers, these findings indicate that governance structure and the operation of public filtration plants should be enhanced. Ongoing maintenance and quality control are also required to ensure that these plants deliver more reliable services and to reduce health risks posed by the use of poor quality water.