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Presented in this paper are the results of two contingent valuation analyses, one undertaken in Ecuador and the other in Guatemala, of potential payments for environmental services (PES) directed toward rural households. We find that minimum compensation demanded by these households is far from uniform, depending in particular on individual strategies for raising incomes and dealing with risks. Our findings strengthen the case for allowing conservation payments to vary among recipients, which would be a departure from the current norm for PES initiatives in Latin America.

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The main objective of the study presented in this chapter was to determine if communities in Cotacachi, Ecuador, are willing to help pay for improving the quality and reliability of their spring drinking water systems. Data were collected from a sample of 80 households from 10 different communities in September 2002. The results showed that respondents are willing to pay an average of US$ 1.84 per month to improve the quality and reliability of their water system, which is approximately 50% more than what they are currently paying. The study reveals the problems related to drinking water that most indigenous communities in the Andes of Ecuador face. Most of these communities have enough water, but mismanagement has led to shortages and quality problems.