Willingness to pay for improving water supply continuity in case of climatic extreme natural events: an empirical approach for Chile

Abstract

In this study, a single-bounded dichotomous contingent valuation design was employed to examine customers’ willingness to pay (WTP) for a water company’s initiatives to increase the drinking water service’s autonomy during extreme climatic events in the Metropolitan Region of Chile in 2020. Considering that this country is a paradigmatic case of almost full access to drinking water service in urban areas, this research is one of the first attempts to measure customers’ WTP for initiatives to increase the drinking water service’s autonomy when natural extreme events occur. Findings indicate an average WTP of CLP 1,371 (USD 1.81), equivalent to 16.72% of the average water bills per month. We also found significant differences in WTP among water suppliers. Although most sociodemographic predictors are not relevant, the results regarding WTP determinants also suggest that political attitudes are especially important, revealing polarized preferences about water suppliers in need of climate change adaptation.