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This paper examines the demand for environmental quality - clean drinking water in particular - in Kathmandu, Nepal. Water supply is inadequate, unreliable, low quality and not directly potable. Residents engage in several strategies to cope with unreliable and low quality water supplies. Some of the major strategies are: hauling, storing, boiling and filtering. A Report on the Water Survey of Kathmandu Valley 2005 suggested that over 45 per cent of households filter water to make it potable, while about 39 per cent of households boil water. Use of Uro Guard and the Solar Disinfection System (SODIS) are other purification methods. To date, there has been little empirical analysis of such purification behaviors. This paper investigates these purification behaviors and the factors influencing them. We consider different types of treatments as demand for environmental quality. Using the Water Survey of Kathmandu, we estimate the effect of education level of household head, exposure to the media, gender, caste, ethnicity and opinion of water quality on drinking water purification. Treatment costs are calculated from respondents’ answers on treatment types, market price and value of time. We also estimate expected willingness to pay for environmental quality from the average cost for different types of treatment. Moreover, the impact of education level of household head, exposure to media, gender, caste, and ethnicity on willingness to pay is also evaluated.

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Oct 16th, 12:00 AM

Demand for Environmental Quality: Evidence on Drinking Water from Kathmandu, Nepal

This paper examines the demand for environmental quality - clean drinking water in particular - in Kathmandu, Nepal. Water supply is inadequate, unreliable, low quality and not directly potable. Residents engage in several strategies to cope with unreliable and low quality water supplies. Some of the major strategies are: hauling, storing, boiling and filtering. A Report on the Water Survey of Kathmandu Valley 2005 suggested that over 45 per cent of households filter water to make it potable, while about 39 per cent of households boil water. Use of Uro Guard and the Solar Disinfection System (SODIS) are other purification methods. To date, there has been little empirical analysis of such purification behaviors. This paper investigates these purification behaviors and the factors influencing them. We consider different types of treatments as demand for environmental quality. Using the Water Survey of Kathmandu, we estimate the effect of education level of household head, exposure to the media, gender, caste, ethnicity and opinion of water quality on drinking water purification. Treatment costs are calculated from respondents’ answers on treatment types, market price and value of time. We also estimate expected willingness to pay for environmental quality from the average cost for different types of treatment. Moreover, the impact of education level of household head, exposure to media, gender, caste, and ethnicity on willingness to pay is also evaluated.