Willingness to Pay for Water Quality Improvement: A Study of Powai Lake in India

The Powai Lake in Mumbai, India, spreading over 2.10 square kilometres, is in the heart of the most crowded India's premier metropolis. It consists of rich ecosystem of considerable value and interest, supporting wide variety of flora and fauna and a habitat for wild variety of aquatic animals. Now, it is increasingly being impacted by human activities, resulting in choking off the shoreline, and deteriorating water quality. In this context it is important to understand how to effectively protect the present status and to improve the water quality of the lake. Benefits of improvement as perceived by the users serves as a critical input for devising policy instrument based on economic principles. This paper attempts valuing improvement in water quality through 'Contingent Valuation Method' (CVM). Then the paper analyses the factors determining the WTP by the users for improvement in water quality using regression tool. A survey was conducted of about 300 samples, living in approximately five kilometres radius of the lake. The survey was done in two rounds, one in 2005 and another in 2007 to determine the changes that occur over time in terms of quality as well as perception of the users regarding the benefits of the lake. The results indicate that the average WTP have increased from 2005 to 2007 after adjusting for general price increase. Income, occupation and uses of the lake are the important attributes explaining WTP. On an average, salaried class is willing to pay 30% more according to 2007 survey. The respondents attach more values to the aesthetic benefits. The results are useful in designing policies based on market-based instruments such as charges or taxes for the purpose of improving the lake quality.

• Publication year

  2011

• Venue

  Asian Journal of Water, Environment and Pollution

• Publication date

  2011-01-01

• Fields of study

  Business, Economics, Environmental Science

• Identifiers
  DOI 10.3233/AJW-2011-8_1_04
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

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