Abstract
This paper uses a Double Bounded Dichotomous Choice (DBDC) Contingent Valuation (CV) method to elicit willingness to pay (WTP) for improved water services in the hill town of Darjeeling in India. The findings of the bivariate probit model reveal that gender of the head of the family, age of the head, total time taken to collect water, water treatment, water source and distance were among the significant and the major determinants of WTP for improved water services. The WTP estimated using the delta method was about INR 494.00 (USD 1 ~ INR 60.00 as of March 2014) per month, which is about 12 times the amount they currently pay. A major policy implication is that there is a huge potential for investment in water projects in the town because of the high WTP and the households’ preference for local water body or any organised service provider over the private water vendors.
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