Estimating rural households' willingness to pay for water supply improvements: a Benin case study using a semi-nonparametric bivariate probit approach

Abstract

This paper estimates households' willingness to pay (WTP) to improve rural water supply in Benin. Particular attention is given to the distribution of WTP, which is traditionally addressed using parametric assumptions. To avoid distributional assumptions, a semi-nonparametric bivariate probit approach is introduced. Results provide the first evidence that, in rural Benin, households wanting to improve water supply are willing to pay more than the current price. WTP for water supply is determined by wealth, education, and characteristics of existing and new water systems. Results indicate that a demand-driven management approach can contribute to water supply improvements and sustainability.