Abstract
This study used household survey data from four Kenyan towns to examine the effect of households' characteristics and risk perceptions on their decision to treat/filter water as well as on their choice of main drinking water source. Because the two decisions may be jointly made by the household, a seemingly unrelated bivariate probit model was estimated. It turned out that treating non-piped water and using piped water as a main drinking water source were substitutes. The evidence supports the finding that perceived risks significantly correlate with a household's decision to treat non-piped water before drinking it. The study also found that higher connection fees reduced the likelihood of households connecting to the piped network. Because the current connection fee acts as a cost hurdle which deters households from getting a connection, the study recommends a system where households pay the connection fee in instalments, through a prepaid water scheme or through a subsidy scheme.
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