Are Households Willing to Finance the Cost of Individual Water Supply? Case Study in Central Tunisia

Abstract

In developing countries, the Sustainable Development Goals (SDG) set by the United Nations and the expectations expressed by modern local populations call for universal water access through individual connections (IC), to be achieved by 2030. An ambitious target such as this presents the challenge of how best to achieve the goal of funding high-quality but expensive water supply systems, to serve populations with low incomes. This raises the question of the assessment of the relevant households’ willingness to pay (WTP) for improved water service in rural areas, in particular in the context of developing countries. This paper examines this issue using a case study in Tunisia. As with other developing countries, Tunisia faces difficult challenges: the increasing demand for water and the inherent cost that is involved must be met whilst climate change is likely to increase the pressure on already stressed resources. The approach applied in this paper is to assess the households’ WTP using a contingent valuation (CV) method in a dedicated field household survey in Central Tunisia. The particular governorate in which the survey was conducted was facing at the time of this study high social expectations, in particular, coming under increasing demand from inhabitants of rural communities to be individually connected to water supplies in the same way as their urban counterparts who were served by SONEDE, the national utility company. The results of the survey reveal that non-SONEDE-piped households were not willing to pay the amount required in order to have an individual connection (the average bid was USD 443 whereas the expected contribution is above USD 800). It was found that a household’s WTP for an individual connection had a direct relationship with its trust in the current water management model, alternative modes of supply, and its socio-economic characteristics. However, if already connected, households would be willing to pay more than their current water expenses, although the amount they were willing to pay was still lower than the sustainable water cost enabling long-term maintenance of the system. SONEDE-piped households stated a clear WTP the amount required to keep water services for the future (average bid of USD 14 to add to their current quarterly water bill of USD 14). Based on these results, this paper concludes by highlighting several policy implications.