TY - JOUR
T1 - Measuring the Economic Benefits of the Tap Water Supply Service in Urban Areas
T2 - The Case of Korea
AU - Lee, Won Seok
AU - Yoo, Seung Hoon
AU - Kim, Jeehyeong
PY - 2013/1
Y1 - 2013/1
N2 - This paper attempts to measure the economic benefits of tap water supply services in some urban areas of Korea. According to micro-economic theory, the economic benefit of water consumed is the sum of the actual water price and the additional willingness to pay (WTP) for the consumption. We apply the dichotomous choice contingent valuation method to assess the additional WTP using specific cases of four cities located in the metropolitan area of Korea. Both parametric and non-parametric approaches to obtaining the mean WTP estimates are used. The results show that the mean additional WTP for the tap water supply service is estimated to be KRW 163.38 (USD 0.13) and KRW 223.89 (USD 0.18) per m3 using parametric and non-parametric approaches, respectively. Given that the price of tap water is 641.66 per m3, the residents' economic benefits that ensue from the tap water supply service are computed as KRW 805.04 (USD 0.63) and KRW 865.55 (USD 0.68) per m3, respectively. This information can be beneficially utilized in conducting an economic feasibility study for a new project related to tap water supply service.
AB - This paper attempts to measure the economic benefits of tap water supply services in some urban areas of Korea. According to micro-economic theory, the economic benefit of water consumed is the sum of the actual water price and the additional willingness to pay (WTP) for the consumption. We apply the dichotomous choice contingent valuation method to assess the additional WTP using specific cases of four cities located in the metropolitan area of Korea. Both parametric and non-parametric approaches to obtaining the mean WTP estimates are used. The results show that the mean additional WTP for the tap water supply service is estimated to be KRW 163.38 (USD 0.13) and KRW 223.89 (USD 0.18) per m3 using parametric and non-parametric approaches, respectively. Given that the price of tap water is 641.66 per m3, the residents' economic benefits that ensue from the tap water supply service are computed as KRW 805.04 (USD 0.63) and KRW 865.55 (USD 0.68) per m3, respectively. This information can be beneficially utilized in conducting an economic feasibility study for a new project related to tap water supply service.
KW - Benefit
KW - Contingent valuation
KW - Tap water supply service
KW - Willingness to pay
UR - https://www.scopus.com/pages/publications/84871719085
U2 - 10.1007/s11269-012-0206-y
DO - 10.1007/s11269-012-0206-y
M3 - Article
AN - SCOPUS:84871719085
SN - 0920-4741
VL - 27
SP - 619
EP - 627
JO - Water Resources Management
JF - Water Resources Management
IS - 2
ER -