Willingness to Pay for Improved Urban Domestic Water Supply System: The Case of Hanoi, Vietnam

Abstract

Access to a reliable and safe domestic water supply is a serious challenge for many developing countries worldwide. In the capital of Vietnam, Hanoi, the municipal government is facing a number of difficulties in providing sufficient water in a sustainable manner due to the increasing urban population and the serious pollution of both surface and groundwater resources, but this is also due to a lack of resources to invest in the supply system. This study aimed to investigate water users’ willingness to pay for the improvement of Hanoi’s domestic water supply system. A contingent valuation process based on a survey of 402 respondents was used to explore citizens’ willingness to pay (WTP) for the improvement of their urban water supply. The results show that Hanoi’s urban communities (more than 90%) were generally satisfied with the quantity of their water supply, but tended to be dissatisfied with its quality, with 80% of the respondents using advanced water purifiers before drinking and cooking. Respondents were also concerned about the overall reliability of the service, with 40% of respondents indicating that they received no check and maintenance service. A WTP regression model was developed based on the survey findings. The average WTP is 281,000 dong/household/month (approximately 12.2 USD at the exchange rate of 1 USD to about 23,000 VND), equivalent to 1.4% of the average household income at the end of 2019, indicating the level of affordability of monthly water payments among Hanoi citizens.