Demand for Piped Drinking Water and a Formal Sewer System in Bhutan

38 Pages Posted: 19 Apr 2018

See all articles by Ngawang Dendup

Ngawang Dendup

Waseda University - Graduate School of Economics

Kuenzang Tshering

Royal University of Bhutan - Sherubtse College

Date Written: April 3, 2018

Abstract

In this study, we estimate demand for sewage connection and piped drinking water in Bhutan. To estimate household willingness to pay, we use data from a sample of 8968 households surveyed through the Bhutan Living Standard Survey of 2012. A hedonic model is estimated using heckman two step procedure to overcome the problem of sample selection bias. On average, households in Thimphu city are willing to pay Nu 452 (USD 7) and Nu 124 (USD 2) per month for piped drinking water connections and sewage respectively. This translate to 8 percent and 2 percent of their monthly household expenditure for water and sewage connection respectively. The households in Thimphu are willing to pay significantly more than the current joint charge of Nu 78 per month for water and sanitation. There is scope for municipal offices in Bhutan to increase their revenues from public services and to cover potential investment, maintenance and operational costs associated with water and sewage services.

Keywords: Hedonic, Bhutan, Sewage, Water, WTP, Heckman

JEL Classification: Q25, Q51, Q52, Q53, Q56

Suggested Citation

Dendup, Ngawang and Tshering, Kuenzang, Demand for Piped Drinking Water and a Formal Sewer System in Bhutan (April 3, 2018). Available at SSRN: https://ssrn.com/abstract=3155234 or http://dx.doi.org/10.2139/ssrn.3155234

Ngawang Dendup (Contact Author)

Waseda University - Graduate School of Economics ( email )

1-6-1 Nishi-waseda, Shinjuku-ku
Tokyo
Japan

Kuenzang Tshering

Royal University of Bhutan - Sherubtse College ( email )

Trashigang
Bhutan

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