Measuring the Economic Benefits of the Tap Water Supply Service in Urban Areas: The Case of Korea

Won Seok Lee, Seung Hoon Yoo, Jeehyeong Khim

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

This paper attempts to measure the economic benefits of tap water supply services in some urban areas of Korea. According to micro-economic theory, the economic benefit of water consumed is the sum of the actual water price and the additional willingness to pay (WTP) for the consumption. We apply the dichotomous choice contingent valuation method to assess the additional WTP using specific cases of four cities located in the metropolitan area of Korea. Both parametric and non-parametric approaches to obtaining the mean WTP estimates are used. The results show that the mean additional WTP for the tap water supply service is estimated to be KRW 163.38 (USD 0.13) and KRW 223.89 (USD 0.18) per m3 using parametric and non-parametric approaches, respectively. Given that the price of tap water is 641.66 per m3, the residents' economic benefits that ensue from the tap water supply service are computed as KRW 805.04 (USD 0.63) and KRW 865.55 (USD 0.68) per m3, respectively. This information can be beneficially utilized in conducting an economic feasibility study for a new project related to tap water supply service.

Original languageEnglish
Pages (from-to)619-627
Number of pages9
JournalWater Resources Management
Volume27
Issue number2
DOIs
Publication statusPublished - 2013

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willingness to pay
Water supply
urban area
water supply
Economics
economics
microeconomics
economic theory
contingent valuation
feasibility study
Water
water
metropolitan area
measuring
services
price

Keywords

  • Benefit
  • Contingent valuation
  • Tap water supply service
  • Willingness to pay

ASJC Scopus subject areas

  • Water Science and Technology
  • Civil and Structural Engineering

Cite this

Measuring the Economic Benefits of the Tap Water Supply Service in Urban Areas : The Case of Korea. / Lee, Won Seok; Yoo, Seung Hoon; Khim, Jeehyeong.

In: Water Resources Management, Vol. 27, No. 2, 2013, p. 619-627.

Research output: Contribution to journalArticle

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