TITLE:
Willingness-to-Pay for Potable Water in the Accra-Tema Metropolitan Area of Ghana
AUTHORS:
Daniel Kwabena Twerefou, Kwadwo A. Tutu, Ebo Botchway, Samuel Darkwah
KEYWORDS:
Willingness to Pay, Contingent Valuation Method, Demand for Water
JOURNAL NAME:
Modern Economy,
Vol.6 No.12,
December
29,
2015
ABSTRACT: A major problem
confronting the Accra-Tema Metropolitan area of Ghana is the provision of potable
water supply. One reason for this occurrence is the inability of Ghana Water
Company Limited to meet the growing demand. This can partly be attributable to the
ineffective pricing by the PURC which is below cost recovery levels. In this
study we investigate household’s willingness-to-pay (WTP) for potable water
supply together with the factors that determine WTP by using the Contingent
Valuation Method (CVM). The results indicate that households in the Accra-Tema
metropolis are willing to pay on the average GH￠0.10 for a bucket (17.5 litres)
of water which is about 7 times more than what they are paying currently.
Analysis of the factors that influence households WTP indicates that income,
time spent to fetch water from existing sources, level of education, sanitation
facility, perceived quality of current water supply, sex of the respondent and
marital status are the main factors influencing households WTP for potable
water supply services in the metropolis. We recommend that government improve
water supply and increase tariffs since people are prepared to pay more for
potable water supply as well as reduce inefficiencies that exist in the sector.