Benefit Transfer Function to Estimate WTP for Rural Water Supply in Pakistan

抄録

In this paper, we highlight the effectiveness of a benefit transfer function to estimate economic benefits of a development project in a developing country. Due to high costs, time, and data requirements for non-market valuation techniques, a valid benefit transfer function could be a better option to estimate economic benefits of rural water supply in terms of willingness to pay (WTP). The validity of the benefit transfer function could be assessed from the difference between actual and projected estimates. We test this hypothesis with the empirical findings from a rural water supply project in Pakistan. We conducted contingent valuation (CV) survey in the five villages to estimate the actual WTP. Then, we adapt a single study based domestic benefit transfer function to estimate the economic benefits in the other villages. This function is based on risk characteristics, household characteristics, and CV characteristics. The health characteristics are locally constant and having a relationship with the household characteristics. Therefore, the household characteristics are the major input for the transfer function and those can be adapted from secondary data sources. We compare the actual and projected WTP for the five sample villages and we find a difference of around 5% in four villages, which are located in brackish water zone. The difference is about 25% in the only village from sweet water zone, where water supply is not the priority in comparison with other basic facilities. Based on this transfer function, we estimate the benefits in 51 villages and then from cost-benefit ratio, we find this project as economically viable under unified policy.