Evaluating Consumers’ Willingness to Pay for Improved Potable Water Quality and Quantity

The present research is about water supply shortages and low drinking water quality in the Municipality of Rethymno during peak water demand periods. More specifically, the aim of this work is to elicit Rethymno residents’ willingness to pay (WTP), by applying the CVM methodology, as the percent over their water bill, for the completion of future projects that the Municipal Enterprise for Water Supply and Sewerage (MEWSS) of Rethymno intends to implement to avoid shortages and improve tap water quality. The current contingent valuation study is performed based on data collected through personal interviews where respondents are asked about their WTP for a given improvement in the water supply. The results point out that female respondents, households with high income, with children, and households which do not use tap water for drinking, are on average willing to pay more. The mean WTP for these future projects was estimated to be 10.64 € (17.67% of the average bill). The mean WTP amount can be useful to decision makers undertaking an environmental cost benefit analysis, where full cost should be recovered. Interviewing people in the context of a valuation scenario, informs them for improvements that will be undertaken from the new projects under consideration and at the same time involves them as users in the decision making process. Copyright Springer Science+Business Media B.V. 2008