System Reliability and Water Service Decentralization: Investigating Household Preferences in Nicaragua

Concern continues to grow over unreliable water access at the household level in many developing countries. A contingent valuation survey was designed to elicit willingness-to-pay for safe and reliable drinking water in León, Nicaragua. In addition, split-sample treatments were used to investigate preferences for two forms of service governance: the current, centralized water supplier and a decentralized service implemented at the municipal level. Results show that households are willing to pay a substantial increase in their water bills for reliable water supply. Findings also indicate that households hold greater confidence in the current, centralized provider rather than a localized service based on several characteristics such as overall service, awareness of water issues, interest in solving water problems, capacity, accountability, and potential investment.