Abstract
Mandatory water use restrictions have become a common feature of the urban water management landscape in countries like Australia. Water restrictions limit how water can be used and their impacts have often been enumerated by using stated preference techniques, like contingent valuation. Most interest in these studies emerged in times of drought, when the severity of restrictions and their deployment had increased and water managers contemplate supply augmentation measures. A question thus arises as to whether the same estimates can be legitimately deployed to water supply projects undertaken when water is more plentiful. This study sheds light on the impact on estimates of willingness to pay when the climatic backdrop to a contingent valuation experiment is altered. We report the results of a comparison between two surveys, undertaken in 2008 and 2012, using a common multiple-bounded discrete choice contingent valuation design, administered across six cities in Australia, covering metropolitan and regional settings. Using a finite mixture, scaled ordered probit model we investigate changes over time in willingness to pay by city, and also causes of individual heterogeneity in willingness to pay. We find that willingness to pay estimates significantly change over time in most regional centres but this is not the case for the major cities of Sydney and Melbourne, once changes in housing prices are included in the analysis.
Highlights
The climate variability that characterises Australia makes periods of drought the norm
One of the primary objectives of this study was to investigate if there was a significant difference in the willingness to pay (WTP) values when there is a different climate setting
The data from the study conducted by Cooper et al (2011) was used (Sample 1) and an additional multiple-bounded discrete choice (MBDC) contingent valuation (CV) experiment was conducted in 2012 post drought (Sample 2)
Summary
The climate variability that characterises Australia makes periods of drought the norm. The unprecedented ‘millennium drought’ in south–eastern Australia between the late 1990s and the first decade of the 2000s triggered several policy responses, including conservation measures and ‘demand management’ initiatives that prohibit some water uses. These constraints have been limited to outdoor activities, or what is considered ‘discretionary’ water use (National Water Commissions 2007), but the notion of mandatory restrictions on household water use is well-engrained in planning and policy in major urban centres. Much of the argument lies on the negative aspects of enforcing water restrictions and other conservation measures over a sustained and long term (Willis et al 2013). Households are often assigned specific days that they are permitted to undertake water-using activities, such as watering gardens but not lawns, late in the evening and only with a bucket or hand-held hose
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