Valuing Water Service Improvements through Revealed Preference: Averting Behaviour Method

Access to quality and adequate water supply is a basic need to sustain human life. Health risk of unsafe drinking water is a serious issue in many poor and underserved communities in developing countries. Therefore, the improvements of the health status of the people are considered as one of the main justifications of promoting investment in water infrastructure. People take a number of coping strategies for water service improvement and the expenditures on such measures implicitly reflect their preferences for water service improvements. This paper leads to estimation of the benefits of water service improvements using the Averting Expenditure Method. This study examines the determinants of averting actions and the prevailing health impacts using the Probit models aiming to examine why some households practice averting measures and have experienced with health impacts while others not. Study found that the respondent’s socio-economic attributes significantly determine the choice of averting behaviours. Then this study calculates the monitory values of number of averting measures and it was found that the mean averting expenditures of the household are Rs. 577 and Rs,. 740 per month respectively the households connected to the system and un-connected to the system. piped households spending an average about Rs. 500 per month as a damage cost of water related health impacts which is unseen but part of the real cost of lack of access to good quality water supply. Study conclude that the WTP estimates are much higher than the payments for existing piped schemes hence cost of clean and consistent water supply could be finance through a user payment scheme.