Ability and Willingness to Pay for Waste Water Management Services: A Case Study in Lampung Province, Indonesia

This study aims to estimate and calculate the ability to pay (ATP) and the willingness to pay (WTP) of households for wastewater management services (IPAL), the relationship between ATP and WTP, and factors that affect WTP. The location of IPAL construction is in the area of Lampung Province, Indonesia. There are 158 selected households for this study. The study employs a purposive sampling method in which the characteristics of households are classified into 3 categories - former households, newcomer households who had come to this area and have no experience of using water supply services, and newcomer households who have experience of using water supply services such as PDAM. The results of this study are, ATP and WTP values were not always in the same direction. The highest ATP was for newcomer households with experience of water supply services but the WTP was the lowest, on the contrary, the lowest ATP was for former households, but the WTP was the highest. Furthermore, experience and cognitive reference are positively correlated with WTP. Service quality perception, education/knowledge of respondents about environmental conservation, and level of income correlate with WTP.