Administering Contingent Valuation Surveys in Developing Countries

In this paper I discuss some of the issues that have arisen and some of the lessons learned over the last ten years about administering CV surveys in developing countries. The discussion is organized around five distinct issues: (1) ethical problems in conducting contingent valuation surveys; (2) explaining what a contingent valuation study is all about; (3) interpreting responses to contingent valuation questions; (4) setting referendum prices; and (5) constructing joint public-private CV scenarios. This list is not meant to be exhaustive, but it will hopefully provide the reader with insights into some of the issues involving in conducting CV surveys in developing countries.Contingent valuation survey

Individuals' Rates of Time Preference for Life-Saving Programs in Developing Countries: Results from a Multi-Country Study

Individuals' time preferences for mortality reductions are measured in six Less Developed Countries in Africa, Eastern Europe, and Asia using the contingent valuation method. The results indicate that individuals' discount factors are much lower than those estimated for a United States sample. Also, respondents' intertemporal preferences for saving lives are characterized by a nonexponential discount function. We conclude that the discounting practices currently used in standard economic analyses of development projects are probably poor representations of individuals' actual intertemporal preferences.Time preference

Willingness to pay for air quality improvements in Sofia, Bulgaria

Through a survey the authors study willingness to pay for improvements in air quality in Sofia, Bulgaria. Using a stochastic payment car approach - asking respondents the likelihood that they would agree to pay a series of prices - they estimate the distribution of willingness to pay various prices. They find that people in Sofia are willing to pay up to about 4.2 percent of their income for a program to improve air quality. The income elasticity of willingness to pay for air quality improvements is about 27 percent. For comparison, they also used the referendum contingent valuation approach. Results from that approach yielded a higher estimate of willingness to pay.Economic Theory&Research,Biodiversity,Environmental Economics&Policies,Payment Systems&Infrastructure,Public Health Promotion,Biodiversity,Montreal Protocol,Access to Markets,Economic Theory&Research,Environmental Economics&Policies

The Use of Hypothetical Baselines in Stated Preference Surveys

Researchers using stated preference (SP) techniques have increasingly come to rely on what we call “hypothetical baselines.” By this we mean that respondents are provided with a description of a current state, or baseline, but that this baseline is intentionally not the actual state of environmental quality, health, or other condition. The researcher then poses a valuation question or choice task that is contingent, not on the existing status quo, but rather on the state of the world described in this new hypothetical baseline. In this paper, we argue that researchers using SP techniques have often used hypothetical baselines without carefully considering the cognitive challenges this poses for respondents or the difficulties this practice creates for advising policymakers. We present a simple typology of four types of SP studies, two of which rely on hypothetical baselines, and give six examples of conditions that an SP researcher may change to create a hypothetical baseline. We discuss four main reasons why SP analysts use hypothetical baselines in their research designs, plus some of the risks associated with the use of hypothetical baselines. Finally, we offer guidance for the use of hypothetical baselines in future SP surveys.stated preference, environmental valuation, health valuation, contingent valuation, choice experiments, baseline, status quo

Using contingent valuation in the design of payments for environmental services mechanisms: a review and assessment

In this paper we review CV studies conducted in the context of PES programs, almost all of which attempt to estimate the demand of downstream water users for upstream watershed protection and, more generally, for improved water services. Our objective is to assess the quality of these CV-PES studies, and their usefulness for designing PES programs.payments for environmental services; contingent valuation; stated preferences; water users; willingness to pay

The Political Economy of Increasing Block Tariffs for Water in Developing Countries

Increasing block tariffs (IBTs) have become the tariff structure of choice in developing countries. Multilateral donors, international financial and engineering consultants, and water sector professionals working in developing countries all commonly presume that IBT structures are the most appropriate way to determine water users' monthly bills. Most, if not all recent water tariff studies performed for developing countries propose IBT structures. The objective of this paper is to critically examine the current fashion of using IBTs in cities in developing countries. In the second section of the paper, we review the common arguments made to justify the adoption of IBTs, and present some actual IBTs currently in use in selected cities. In the third section of the paper we discuss the objectives and considerations involved in water tariff design so as to provide a basis for judging the appropriateness of IBTs.Tariff

Possible Adverse Effects of Increasing Block Water Tariffs in Developing Countries

The use of increasing block water tariffs is widespread throughout developing countries. An increasing block tariff (IBT) is a price structure in which a commodity is priced at a low initial rate up to a specified volume of use (block), then at a higher or several increasingly higher rates for additional blocks used. The ordinary household municipal water bill in developing countries is often calculated on some sort of IBT structure, and donor organizations and consultants continue to recommend this practice for town and city water systems. The major- ity of World Bank-sponsored water tariff studies conducted since 1970, for example, have recommended the use of increasing block water tariff

Infrastructure coverage and the poor : the global perspective

The authors use the World Bank's Living Standards Measurement Study (LSMS) surveys from 15 countries (covering more than 55,500 households) to examine the relationship between infrastructure coverage and household income. The results show that throughout the world all income groups have much higher levels of coverage for electricity than for other formal infrastructure services (in-house piped water service, sewerage service, and private telephone service). In many countries most households in urban areas now have electricity service. As monthly household incomes increase from $100 to$250, coverage of all these infrastructure services rises, but at different rates. The findings confirm that the very poor rarely have these infrastructure services - with exceptions. The very poor often do have electricity if they live in urban areas. The very poor in Eastern Europe and Central Asia have much higher levels of coverage than those elsewhere in the world; they often have electricity, water, sewer, and telephone services. The results also suggest that if the poor gain access to services in their communities, many will decide to connect.Town Water Supply and Sanitation,Water Use,Housing&Human Habitats,VN-Acb Mis -- IFC-00535908,Health Economics&Finance

Pricing Water and Sanitation Services

human development, water, sanitation