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Consumer willingness to pay for domestic water services in Kelantan


Kamaludin, Mahirah and Radam, Alias and Abdul Rahim, Khalid and Yacob, Mohd Rusli (2013) Consumer willingness to pay for domestic water services in Kelantan. Pertanika Journal of Social Sciences & Humanities, 21 (spec. Sep.). pp. 1-12. ISSN 0128-7702; ESSN: 2231-8534


The importance of water to life cannot be denied as it is the most precious substance among all our natural resources. Rapid population growth and urbanization have increased the demand for water which is expected to undergo substantial changes in the future. Kelantan faces many problems in the water sector. The state lacks financial resources to improve its water supply coverage. In fact, there are numerous functions which are supported by the price of water itself such as the costs of water treatment, water storage, and delivery to its customers. Low water rates may lead to heavy losses to the water provider who is expected to provide various services to the community, including the delivery of clean and adequate water supply. This study utilizes Contingent Valuation Method (CVM) to derive consumers' willingness to pay (WTP) for improved water services, and based on the WTP value obtained, the aggregate monetary benefits of improving water services for the consumers of Kelantan are estimated. Logit model is used to analyze primary data gathered during the survey. The estimated mean WTP for improved domestic water services is RM0.5979 applicable on the first 35m3 (i.e. 8.7% above the current price). The findings offer policy recommendations to address the numerous, serious water issues faced by the state. The appropriate water tariff may help the water provider to overcome the problems /challenges in providing better services in the state.

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Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
Institute of Agricultural and Food Policy Studies
Publisher: Universiti Putra Malaysia Press
Keywords: Contingent valuation method; Willingness to pay; Water prices; Logit model; Water demand
Depositing User: Nabilah Mustapa
Date Deposited: 25 Jul 2015 23:52
Last Modified: 21 Sep 2015 00:33
URI: http://psasir.upm.edu.my/id/eprint/28346
Statistic Details: View Download Statistic

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