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Adequacy and quality are crucial for household water supply. One of the major problems with public utilities such as drinking water in developing countries is intermittent, insufficient and unreliable supply. Nepal is no exception to this. Water is not supplied round the clock, pressure is insufficient to pump it to the tap and the amount of water made available to the public, whatsoever, is not directly potable. To combat these problems, households engage in a variety of coping behaviors. Some of the major strategies for coping with intermittent and unreliable water supply are collecting, pumping, storing, treating and purchasing. This paper estimates the cost of coping with unreliable public water supplies and willingness to pay for improved water supplies in Kathmandu valley. Coping costs are calculated from respondents answers on averting behavior, market price and value of time. Willingness to pay for improved water supply is calculated using stated preference method and compared with the value obtained from revealed preference method. The paper also discusses effects of socio-economic characteristic of household on coping cost and willingness to pay for improved water supply.