An Economic Analysis of Water and Wastewater Investments in Cairo,Egypt

Abstract

Nonmarket valuation methods have proved useful in planning and evaluating investments in water and wastewater infrastructure in developing countries. This study used contingent referendum methods to estimate household willingness to pay for each of four types of service improvements stemming from water and wastewater investments in Cairo, Egypt. An analysis of the net economic benefits of the investments concluded that benefits exceeded costs for all projects. Cost recovery was not assured with a fixed tariff. Willingness to pay for some households was less than the per household cost necessary for cost recovery. Cost recovery was also sensitive to whether tariffs were set for individual services or charged for a combined package of services.