Willingness-to-pay for reliable piped-water services: Evidence from urban Ghana

The primary objective of this research is to estimate the willingness to pay in Ghana for reliable piped water services. Three competing economic valuation approaches are used to do this: the contingent valuation method (CVM), the hedonic pricing method (HPM) and the travel cost method (TCM). These methods allow for easy robustness tests of the estimates and serves as an improvement on previous research. Using survey data from a sample of 1,650 urban households, we obtain estimates of the willingness of households to pay every month for urban piped water services of: GHS 47.80 or US$15.25 (CVM), GHS 44.73 or US$14.27 (HPM) and GHS 22.72 or US$725 (TCM). Such sums account for 3–8% of household income. These empirical calculations are then used to inform policy choices by determining the economic viability of the participation of the private sector in the water sector in Ghana.