Theses and Dissertations

Title

Willingness to pay for improved water supply services in Karachi

Student Number

02370

Degree

Master of Science in Economics

Department

Department of Economics

Date of Award

Spring 2013

Advisor

Dr. Heman Das Lohano

Committee Member 1

Dr. Heman Das Lohano, Institute of Business Administration, Karachi

Project Type

Thesis

Access Type

Restricted Access

Document Version

Final

Pages

xii, 85

Subjects

Public Economics, Regional Economics

Abstract

Karachi, Pakistan's largest cosmopolitan and home to over 21 million people, finds itself unable to fulfill the various public utility needs including basic amenities like water. Access to clean drinking water remains the greatest perceived need of the population (City District Government Karachi, 2007), a deficiency further hampered by the population size of the metropolis. Just three-fifths of the total number of households is connected to the Karachi Water & Sewerage Board (KWSB) supply line, and those connected received daily, only four hours of continuous water supply on average. In order to implement projects that increase water coverage and improve water supply services in a sustainable way, implementation of a cost recovery system is necessary, and for that it is important to examine willingness to pay of the beneficiaries of improved water supply. The objective of this study is to examine the determinants of the willingness to pay (WTP) of water consumers and to find out whether it is possible to increase tariffs. This study uses a contingent valuation method to estimate the mean willingness to pay using double bound dichotomous choice bidding. The total number of households surveyed through in-person interviews is 400. The households were randomly selected from Block 4 and Block 7 of Gulshan-e-Iqbal Town in Karachi. Estimation using interval data model reveal that sampled households expressed their WTP with a mean WTP of Rs. 2244 and Rs. 2080/ month for each model respectively. It also shows income affects the respondent's willingness to pay. The descriptive analysis result reveals that the mean WTP for improved water services is higher than the existing tariff.

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