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http://dx.doi.org/10.3741/JKWRA.2007.40.11.861

Willingness to Pay for Residential Water on Drought Conditions  

Park, Doo-Ho (Korea Institute of Waer & Environment)
Park, Yoon-Shin (Korea waterworks-Management Institute)
Publication Information
Journal of Korea Water Resources Association / v.40, no.11, 2007 , pp. 861-867 More about this Journal
Abstract
This Research analyzes the consumers' willingness to pay(WTP) for residential water on severe drought condition. The 7 large cities and 32 chronicle drought regions have been selected for this research survey. Results show that the consumers of large cities, which are relatively rich, think water quality is more important than quantity, but the consumers of 32 chronicle drought regions expressed just opposite. Dichotomous choice and open-ended questionnaire are mixed for the survey and Tobit model is applied in the analysis. As we expected, the higher the education level, the number of household member, and the income, the higher the WTP. When there is 25% reduction of supply, the WTP is about $2 per month. Contrary to the expectation, WTP is just slightly increased for 50% of water supply reduction. This is because of the resistance of tax as well as the limited actual experiences of water shortage so, they underestimated it. In any cases, actual WTP for actual water shortage is much higher than this result. More effective water supply and distribution schedule must be ready as a national and local level to prepare severe drought in the near future. Consumers are willing to pay higher price than the current level for water security. Water distributional system should be reconsidered and alternative source of water also be prepared.
Keywords
Drought; Water Shortage; Residential Water; Willingness to Pay;
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