Water Supply Security and Willingness to Pay to Avoid Drought Restrictions

11 Pages Posted: 8 May 2006

See all articles by David A. Hensher

David A. Hensher

University of Sydney Business School

Nina Shore

NERA Economic Consulting

Kenneth E. Train

affiliation not provided to SSRN

Abstract

This paper studies Canberra households' and businesses' willingness to pay (WTP) to avoid drought water restrictions, using stated choice experiments. We find that customers evidence a lack of WTP to avoid most types of drought-induced restrictions. Respondents appear unwilling to pay to avoid low-level restrictions at all and to avoid higher levels of restrictions that are not in place every day. Given the option of watering on alternative days, customers appear willing to adjust their watering schedules compared with paying higher water bills and appear willing to tolerate high-level restrictions for limited periods each year, compared with higher water bills.

Suggested Citation

Hensher, David A. and Shore, Nina and Train, Kenneth E., Water Supply Security and Willingness to Pay to Avoid Drought Restrictions. Economic Record, Vol. 82, No. 256, pp. 56-66, March 2006. Available at SSRN: https://ssrn.com/abstract=889139 or http://dx.doi.org/10.1111/j.1475-4932.2006.00293.x

David A. Hensher (Contact Author)

University of Sydney Business School ( email )

Cnr. of Codrington and Rose Streets
Sydney, NSW 2006
Australia
+ 61 2 9351 0071 (Phone)
+ 61 2 9351 0088 (Fax)

HOME PAGE: http://www.its.usyd.edu.au/about_itls/staff/davidh.asp

Nina Shore

NERA Economic Consulting ( email )

London
United Kingdom
+44 20 7659 8826 (Phone)

HOME PAGE: http://www.nera.com/ExpertResults.asp

Kenneth E. Train

affiliation not provided to SSRN

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