Valuing the water supply: ecosystem-based potable water supply management for the Legedadie-Dire catchments, Central Ethiopia

Background There is a substantial interest in the values that consumers place on drinking water quality and supply. Financial resources are crucial to improving the urban potable water supply in developing countries that are characterized by low-cost recovery rates and a high and rapidly growing demand for more reliable services. This study examined households’ willingness to pay (WTP) for the improvement of water services by identifying their water choice decisions and the mode of water supply that they prefer the water supply authority to use among several alternative water supply options. Stated-preference data were collected from 322 randomly selected households in Addis Ababa, who were presented with three sets of choices (three alternative bundle choices, including the reference scenario). The data were analyzed using the mixed logit WTP space model. Three approaches to modeling the distribution of WTP (fixed, uncorrelated, and correlated) using mixed logit WTP space models were compared.