Household’s Perception of Water Quality and Willingness to Pay for Clean Water in Mexico City

Abstract

A 2011 survey of Mexico City’s households revealed that families prefer alternative sources of drinking water instead of relying in the city’s quality supply services. These include the purchase of bottled water, installation of filtration devices, and other means of water purification. The demand for better water quality was tested by estimating the household’s willingness to pay (WTP), using a contingency valuation (CV) experiment through an open-format questionnaire and by estimating a censored econometric (Tobit) model. The econometric study revealed that the WTP for better water quality is influenced by variables related with distrust of the water quality provided by the City and the organoleptic characteristics of the water supply, as well as spending on bottled water or water purification technologies. The average WTP surcharge for better potable water quality is US$3.1 or 4.7% of the bimonthly water bill, which is about 0.22% of the average family income in Mexico City. The percentage of WTP to income is bigger in poor families. This suggests that improving water quality is of greater importance for lower income families. Findings are consistent with previous studies that estimated the WTP for improvements in the services that supply water to households in the city. These include reduction of inefficiency and intermittency of the supply along with water quality, improve measuring water meters, reducing the obsolescence of the infrastructure and increasing adequate maintenance. Our research is the first to estimate the WTP for better water quality in Mexico City and constitutes a reference point for those that address the problem of water quality and its impact on the welfare and income of families.

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