Factors Determining Household Consumer’s Willingness to Pay for Water Consumption in Malaysia

Abstract

Since Malaysia's most recent water reform exercise, the issue on whether Malaysian public (households) would be willing to pay for possible new water tariff in return for services provided for them has arisen. This study investigates whether taste, filtered water, color, water contamination, drinkable tap water, customer services, uninterrupted water supply and income determine Malaysian consumer's willingness to pay (WTP) for their household water consumption. A survey was carried out on more than 262 representing households who are also paid domestic water customers. Multiple regression analyses results showed that only four from the eight factors examined were significant and acted as determinants to WTP. These are taste, uninterrupted water supply, water contamination and income. The study also found that majority of household consumers is only willing to pay for an increase of not more than RM5 from their current water bill. The findings provide an insight particularly for the government and water services providers in Malaysia on factors that they should consider when planning for any water tariff increase.

Service constraints and willingness to pay in community-managed water supply services in Ghana

“…According to Wahid and Hooi (2014), eight determinants are recognized in terms of willingness to pay for better service. These include income, drinking water health risk, quality of water taste, quality of watercolour, quality of filtered water, risk of water contamination, uninterrupted water supply and customer service that handle feedback and complaint and request from consumers.…”

“…In reality, as the income of households increases, their demand for improved services increases. Furthermore, the willingness to pay increases when respondents' income was found to be above the poverty level (Malik et al, 2012;Wahid and Hooi, 2014). According to Hensher et al (2005), when income increases, the probability of the household saying yes to contribute for improved water supply services increases.…”

“…Customer service. According to Wahid and Hooi (2014), the importance of customer service centre is acknowledged as the centre that helps to handle feedback, complaints and requests from consumers. Hensher et al (2005) reported on urban country respondents' preference to have a person answer the phone when they call the service centre rather than having a voice system to provide a message and that they are willing to pay for this service feature.…”

An Investigation on Factors Influencing Public’s Water Efficiency Practice

“…Another study reported on how lower water price led to higher water consumption, and vice versa (Boyer, Adams, & Borisova, 2014). This is why higher water tariff is identified as an efficient way to prevent wastage (Wahid & Hooi, 2014). Water tariff factor influences water consumption to be under control and thus prevent wastage.…”

Gap Analysis Based Decision Support Methodology to Improve Level of Service of Water Services

“…Some previous studies have focused on evaluating customer satisfaction [11][12][13]. However, the previous studies only covered a few subjects, such as water quality and water charge [14][15][16][17]. As aspects and values of water service satisfaction in between a customer and service provider are different [18], a gap in between the two parties gets widened and it makes it difficult to achieve the sustainable provision of water service.…”