Estimation of willingness to pay for improved water supply service: case of Algerian households

The purpose of this article is to evaluate the water company in Algeria (ADE) subscribers’ Willingness To Pay (WTP) for a better service offer. This study assessed the WTP for improved drinking water in the department of Souk-Ahras (Algeria), using contingent valuation survey data of 5,342 households, with a response rate of 10.86% (greater than 10% of each municipality's total number of subscribers). Then, Probit and Tobit models were applied to analyze the determinants of WTP. The results show that the majority of respondents (62.84%) testified that they were not satisfied with the quality of the service provided in terms of quantity and quality of the water distributed. This research revealed that the WTP for an improved water supply service was approximately 16.18 DZD/m3 (approximately 0.11 US$/m3) instead of the current tariff (6.3 DZD/m3–0.04 US$ /m3). With this new water tariff, the average water charge for a household is around 1.37% of the average monthly income.