Willingness to pay to ensure a continuous water supply with minimum restrictions
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Willingness to pay to ensure a continuous water supply with minimum restrictions Clevo Wilson1 · Wasantha Athukorala2 · Benno Torgler1 · Robert Gifford3 · Maria A. Garcia-Valiñas4 · Shunsuke Managi1,5 Received: 14 October 2016 / Accepted: 27 July 2020 © Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract This study provides a quantitative assessment of the willingness to pay to avoid water use restrictions taking into account psychological, attitudinal and behavioural influences. We analyse determinants of households’ willingness to pay to ensure a continuous water supply in Brisbane, Australia. The results show that in addition to socio-economic variables, attitudinal and behavioural factors—including values, norms, and beliefs—influence residents’ valuation. They also underscore the importance of accounting for socio-economic variables and pertinent psychological and behavioural aspects when implementing policies to manage and conserve urban water. Keywords Water use restrictions · Willingness to pay · Residential sector · Behavioural change
1 Introduction Water shortages lead to inconvenience for residents, the imposition of an economic cost on the community, and a loss of a producer surplus for the water authority (Dandy 1992; Hensher et al. 2005; March et al. 2012). In such cases, residents look for alternative ways to avoid or comply with the restrictions. In general, the willingness to pay (WTP) to avoid water restrictions (WTPAR) is driven by such factors as the costs
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Shunsuke Managi [email protected]
1
QUT Business School, Queensland University of Technology, Brisbane, Australia
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Department of Economics, University of Peradeniya, Kandy, Sri Lanka
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School of Psychology, University of Victoria, Victoria, BC, Canada
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School of Economics and Business, University of Oviedo, Asturias, Spain
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Urban Institute & Departments of Urban and Environmental Engineering, Kyushu University, 744, Motooka Nishi-ku, Fukuoka, Japan
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of mitigating action, the value that residents attach to maintaining their gardens, and inconvenience factors associated with water rationing (Hensher et al. 2006). Hence, WTPAR represents the value that citizens attach to maintaining a continuous water supply. One of the costs attached to water restriction is the cost of creating substitute supplies such as rainwater tanks (purchase and installation), which may be linked to some residents’ WTPAR (Brennan et al. 2007). Other costs include those for waterefficient landscaping, replacing plants that die during a period of drought, and finding alternatives for car washing and yard clean-up (Blamey et al. 1999). The WTPAR will not only vary across a community according to residents’ preferences, but also because the restrictions will impact different citizens to varying degrees. For example, residents who value their well-maintained gardens as a visual amenity and a means of relaxation may pay a higher price to avoid restrictions. In other words, the loss of utility from loss of gardenin
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