Contingent Valuation and Actual Behavior: Predicting Connections to New Water Systems in the State of Kerala, India

Abstract

In 1988, families in Kerala State in India were surveyed to ascertain their willingness to pay for household connections to a piped water supply system. In 1991 the families in these communities were surveyed again and their actual decisions recorded. This article explores the validity of the findings of the 1988 study on the basis of actual behavior. It looks at the question of benefit revelation: did people behave as they said they would? And it looks at the question of benefit transfer: did people in one site behave as they were predicted to behave, on the basis of the predictions of a behavioral model for a different site? The data were also used to analyze the policy relevance of behavioral modeling.

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