ESTIMATING WILLINGNESS TO PAY FOR IMPROVED WATER SERVICE IN SHARARO TOWN, CENTERAL ETHIOPIA: A Contingent Valuation Approach

The study aimed to determine how much households in shararo town, central Ethiopia were willing to pay for improved water services. Since water is a vital resource for sustaining life and promoting socio-economic growth, it is crucial to understand its economic value, even though it is not traded in markets. To estimate the willingness to pay, the study used the Contingent Valuation Method (CVM). This method involves conducting a survey and collecting primary data from 378 randomly selected households. The survey employed a specific approach called the Double-Bounded Dichotomous Choice (DBDC) elicitation format, which involved in-person meetings The study also found that the majority of the sampled willingness to pay for water service were female, the mean age of individuals who are likely to willingness to pay for water service is 35.28 years, the mean income of these individuals is 4806.33 Ethiopian Birr per month, and they have a mean of year of the schooling of the individuals is 11.61 years. The logistic regression model had a binary dependent variable (WTP) and 13 explanatory variables, of which 9 were found to be statistically significant. The logistic regression model is statistically significant in predicting willingness to pay for water service. Key factors influencing willingness to pay include sex, education level, family size, employment status, water service quality, awareness, disease exposure, satisfaction, and bid amount. The Double Bounded Dichotomous Choice (DBDC) method was effectively used to estimate the willingness to pay (WTP) for improved water service in Shararo town. The DBDC analysis yielded a mean willingness to pay of 0.40 EB per 20 liters, with a total annual WTP of 8,824,545 ETB for the Shararo town population. In light of these findings, the study recommended the implementation of future projects in the study area, as there is a clear opportunity to provide improved water services that would not only benefit the community but also have the potential for financial sustainability.