Managing Water Resources Under Conditions of Scarcity: On Consumers’ Willingness to Pay for Improving Water Supply Infrastructure

Abstract

Conservation and efficient management of water resources is an essential ingredient for achieving sustainable development. River basins in Southern Europe are suffering from high water stress, while leakages in some areas far surpass recommended levels. This study uses the contingent valuation method in order to assess willingness to pay (WTP) by consumers in the Guadalquivir River basin in Spain for improving urban water supply infrastructure and reducing leakages. On average, individuals would be willing to pay an extra charge on their water bill ranging from €8.23 to €9.65. In addition to the expected positive effect of income on WTP, respondents with negative perceptions of their drinking water quality as well as those most affected by the economic crisis have a lower WTP. Conversely, WTP is higher for men and respondents showing greater commitment to the environment. These results provide policymakers with information that might help them to improve water-pricing policies in a context of severe water scarcity, especially considering the principle of cost recovery introduced by the EU Water Framework Directive in pricing water services.