Measuring the value of potable water in partially monetized rural economies

A pilot study was conducted to test the potential of the Contingent Valuation Methodology (CVM) to reveal the value of non-market goods in partially monetized subsistence economy. CVM was used to estimate the willingness to pay, in the form of labour, for potable drinking water in a rural river-based community located in the Esmeraldas state of northwest Ecuador. Surveys were administered by personal interviews with families living along the waterways of the Santiago river system who used river water for cooking, drinking, washing, and waste disposal. The mean willingness to pay represented over 23 per cent of real income, or 1-4 days per week for a period of one year. Results of multiple regression analysis identified the history of water-related health problems and the number of working adults in a household as significant determinants of willingness to pay. Using a non-monetary, rather than a monetary, measure of willingness to pay may provide a more accurate representation of value in a subsistence economy where the use of money is limited. The potential for CVM to measure the benefits of non-market goods in rural developing regions whose economies are only partially monetized is demonstrated. (author's abstract)