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An approach to determining inefficient water services provision
Expanded Title:Discrete choice experimentation is one form of choice modelling. It utilises a stated preference survey technique to gather data for modelling choice. The aims of the study were to demonstrate that discrete choice experiment analysis and the survey instrument on which it is based could provide useful information about how consumer groups valued water service delivery and how they rated the water services that they were provided. The motivation for undertaking the study is that technical and cost considerations are inducing greater interest among South Africa’s municipal providers of water services to adjust the levels of water services offered to various customer groups. Such adjustments have consumer welfare implications and potential impacts on the demand for water services and these implications and impacts need to be considered along with the technical and cost consequences. The scientific credibility of the discrete choice experiment method of analysis and its appropriateness for application to assess the welfare merit of the levels of water services provided is well established. Background on the science of choice experiment analysis and the steps in applying the methodology are found not to be overly complicated. By incorporating some consumer satisfaction questions in the survey instrument it was possible to analyse customer ratings and perspectives on the water services that are provided at three selected municipalities, namely: Breede Valley and Knysna in the Western Cape and Msunduzi in Kwa-Zulu-Natal. The analysis of the customer satisfaction part of the survey yielded findings that were consistent with assessments reported in the form of Blue and Green Drop certification. Three water service consumer groups were identified for the purpose of this analysis – high income, low income and business firms. The different water service consumer groups in the different municipalities did not share a common perspective on the way water services were managed. Majorities in all groups surveyed within the Breede Valley municipality felt the cost recovery tariff structure they faced was fair, whereas in the Msunduzi and Knysna local municipalities, the majority of the high income and business firm groups felt It was concluded that the discrete choice experiment analysis and survey on which this is based has the potential to yield useful insights into the levels of attributes preferred in the water service mix provided by South African municipalities. Thereby it can inform water service management thinking and policy decision making on potential implications for water service consumer welfare of technological and cost saving induced changes made to water service provision.
Date Published:01/04/2014
Document Type:Research Report
Document Subjects:Drinking water - Water supply
Document Keywords:Guidelines, Municipality
Document Format:Report
Document File Type:pdf
Research Report Type:Standard
WRC Report No:2118/1/14
ISBN No:978-1-4312-0540-0
Authors:Hosking S; Brettenny W; Magobiane S; Sharp G; Hosking J
Project No:K5/2118
Originator:WRC
Organizations:Nelson Mandela Metropolitan University
Document Size:4 898 KB
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