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Individual status quo modelling for a rural water service in Rwanda: application of a choice experiment

Published online by Cambridge University Press:  01 December 2015

Claudine Uwera  and
Jesper Stage Open the ORCID record for Jesper Stage [Opens in a new window]
Claudine Uwera
Affiliation:
Department of Economics, University of Gothenburg, Sweden; and Department of Economics, University of Rwanda, Rwanda. E-mail: Claudine.Uwera@gmail.com
Jesper Stage
Affiliation:
Department of Business Administration, Technology and Social Sciences, Luleå University of Technology, 971 87 Luleå, Sweden; and Department of Business, Economics and Law, Mid Sweden University, Sweden. Tel:+46 (0)920 49 34 45. E-mail: Jesper.Stage@ltu.se
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Abstract

In Rwanda, rural water supply is not uniformly distributed. Rural areas are characterized by differences in the distance to the nearest water point and in water quality for domestic water, by watering frequency and water availability for irrigation water, and by the price for both. A household's perception of further improvements in water supply will, therefore, depend heavily on the situation it currently faces. The authors used a choice experiment to model how the individual status quo (SQ) affects preferences. Accounting for individual SQ information improves model significance relative to simply using the generic SQ parameter in the model, and the willingness to pay increases. Not using this information leads to a downward bias – and, in some cases, statistical insignificance – in estimates of households’ valuation of health improvements linked to improved domestic water availability, as well as of increased watering frequency linked to the improved availability of irrigation water.

Type
Research Article
Information
Environment and Development Economics , Volume 21 , Issue 4 , August 2016 , pp. 490 - 511
Copyright
Copyright © Cambridge University Press 2015 

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