Willingness to pay for improved water supplies in rural Ugandan villages Steven G. Wright, Daya Muralidharan, Alex S. Mayer and William S. Breffle ABSTRACT The contingent valuation method was used to estimate willingness to pay (WTP) for the operation and maintenance of an improved water source in the villages of Kigisu and Rubona in rural Uganda. The survey was conducted in August 2011 and administered to 122 households out of 400 in the community, gathering demographic information, health and water behaviors, and using an iterative bidding process to estimate WTP per 20 L for a public tap. The data were analyzed using an ordered probit model, which predicts monetary intervals for households’ WTP. The model predicts a mean WTP of 356 Ugandan shillings (USD 0.183) per 20 L from a public tap. It was determined that the number of children in the home and the distance from the existing source are significant in influencing household’s WTP, while income, age, and gender are not. Steven G. Wright Alex S. Mayer (corresponding author) Department of Civil & Environmental Engineering, Michigan Technological University, Houghton, Michigan 49931, USA E-mail: asmayer@mtu.edu Daya Muralidharan William S. Breffle School of Business and Economics, Michigan Technological University, Houghton, Michigan 49931, USA Key words | contingent valuation, rural water supply improvements, Uganda, willingness to pay INTRODUCTION Increased access to improved water sources is recognized as critical to improving health and promoting poverty reduction in the developing world. The Millennium Devel- opment Goal 7.3 – halving the population without access to improved water and sanitation – is projected to be missed by half a billion people. Currently, 83% of those with- out access to improved water live in rural areas ( JMP ). Even when new drinking water supply systems are con- structed, they are often not used or maintained properly. For example, the Rural Water Supply Network website indi- cates that 20% of hand-pumps in Uganda are non-functional due to maintenance issues (Harvey ). In some countries, new construction efforts are exceeded by the rate of failure (Mu et al. ). In most areas of the developing world, households have access to water from a variety of sources, which vary greatly in their ease of use, quality, quantity, price, reliability and other factors. These variables combine with social, cultural, and political factors to create a com- plex decision-making process when it comes to household choices among water supply options. Poor access to water is a major contributor to health and economic problems in rural Uganda, where 84% of the population lives in rural areas. As of 2011, only 72% of rural households in Uganda had access to improved water ( JMP ). The under-five mortality rate in Uganda is 15%. Overall, mortality from diarrheal disease is 3%, result- ing in an additional 29,300 deaths annually (UNICEF/ WHO ). Although water supply improvements are expected to reduce the occurrence of waterborne diseases in Uganda, guidelines for making choices for water supply improvements are not clear. Howard et al.() reports that the selection of water supply sources, e.g., piped water supplies vs. household rainwater harvesting, by poor house- holds in urban areas in Uganda is highly variable. Achievement of efficacy, equity, and sustainability in water supply services requires an understanding of the deter- minants of household preferences towards various aspects of water supply projects, including the associated willing- ness to pay (WTP) for water supply improvements (Whittington et al. ; McPhail a, b; Goldblatt ; Fujita et al. ; Farolfi et al. ; Awad & Hollander ). WTP estimates for water supply improvements have been found to be site specific(Wedgewood & Sansom ; Whittington et al. ). In rural Zimbabwe, 490 © IWA Publishing 2014 Journal of Water, Sanitation and Hygiene for Development | 04.3 | 2014 doi: 10.2166/washdev.2013.011