Economic issues of water price identification and demand estimation when price is cryptic: Experience from Windhoek, Namibia

The dissertation consists of two related studies of water access for different water users in Windhoek, Namibia. The first study applies a hedonic price model to show that, on average, the low-income public water users pay the least, with a subjective monthly water charge of N;The results indicate that there is "bias" in the water users' estimation of their reported utility bill, a fairly clear one with respect to income, and a weak or marginal one with respect to the group of additional variables. This "bias" could result from psychological misperception or price illusion of the water users, or from some unknown real price factor related to income but not controlled for by the market segmentation. The simple interpretation is that being in a higher income level makes people believe that they pay more for water. In general, the findings suggest that though water users may not always know their exact water prices, it appears that they are fairly accurate in their implicit price beliefs, even when water charges are hidden in utility bills.;The second study uses contingent valuation (CV) to estimate the willingness to pay (WTP) for water connections by the unconnected water users. Results show that the low-income water users are willing to pay about N...