Factors Determining Household Consumer’s Willingness to Pay for Water Consumption in Malaysia

Abstract

Since Malaysia’s most recent water reform exercise, the issue on whether Malaysian public (households) wouldbe willing to pay for possible new water tariff in return for services provided for them has arisen. This studyinvestigates whether taste, filtered water, color, water contamination, drinkable tap water, customer services,uninterrupted water supply and income determine Malaysian consumer’s willingness to pay (WTP) for theirhousehold water consumption. A survey was carried out on more than 262 representing households who are alsopaid domestic water customers. Multiple regression analyses results showed that only four from the eight factorsexamined were significant and acted as determinants to WTP. These are taste, uninterrupted water supply, watercontamination and income. The study also found that majority of household consumers is only willing to pay foran increase of not more than RM5 from their current water bill. The findings provide an insight particularly forthe government and water services providers in Malaysia on factors that they should consider when planning forany water tariff increase.