Journal Article

A Hedonic Valuation of Residential Water Services

William F. Vásquez

in Applied Economic Perspectives and Policy

Published on behalf of Agricultural and Applied Economics Association

Volume 35, issue 4, pages 661-678
Published in print December 2013 | ISSN: 2040-5790
Published online August 2013 | e-ISSN: 2040-5804 | DOI: https://dx.doi.org/10.1093/aepp/ppt022
A Hedonic Valuation of Residential Water Services

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This paper investigates the economic value of municipal, private, and community-managed water services in Guatemala through a hedonic analysis of rental housing prices observed in 2006. Hedonic models are jointly estimated with water service choices using a maximum simulated likelihood approach in order to control for potential endogeneity. Findings indicate that the value of piped water depends on the type of water utility. The estimated value of municipal services is at least 15 times as much as the average water bill, while value estimates are not significant for private and community-managed systems. Value differentials are discussed considering the performance of water utilities and their institutional arrangements.

Keywords: Water; Service management; Household preferences; Hedonic analysis; Guatemala; O13; Q25; Q51

Journal Article.  6795 words.  Illustrated.

Subjects: Environmental Economics ; Renewable Resources and Conservation ; Economic Development

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