Measuring the Economic Benefits of the Tap Water Supply Service in Urban Areas: The Case of Korea

Won Seok Lee, Seung Hoon Yoo, Jeehyeong Kim

    Research output: Contribution to journalArticlepeer-review

    10 Citations (Scopus)

    Abstract

    This paper attempts to measure the economic benefits of tap water supply services in some urban areas of Korea. According to micro-economic theory, the economic benefit of water consumed is the sum of the actual water price and the additional willingness to pay (WTP) for the consumption. We apply the dichotomous choice contingent valuation method to assess the additional WTP using specific cases of four cities located in the metropolitan area of Korea. Both parametric and non-parametric approaches to obtaining the mean WTP estimates are used. The results show that the mean additional WTP for the tap water supply service is estimated to be KRW 163.38 (USD 0.13) and KRW 223.89 (USD 0.18) per m3 using parametric and non-parametric approaches, respectively. Given that the price of tap water is 641.66 per m3, the residents' economic benefits that ensue from the tap water supply service are computed as KRW 805.04 (USD 0.63) and KRW 865.55 (USD 0.68) per m3, respectively. This information can be beneficially utilized in conducting an economic feasibility study for a new project related to tap water supply service.

    Original languageEnglish
    Pages (from-to)619-627
    Number of pages9
    JournalWater Resources Management
    Volume27
    Issue number2
    DOIs
    Publication statusPublished - 2013

    Keywords

    • Benefit
    • Contingent valuation
    • Tap water supply service
    • Willingness to pay

    ASJC Scopus subject areas

    • Civil and Structural Engineering
    • Water Science and Technology

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