Willingness to pay for drinking water quality improvements: A contingent valuation study for Southwestern Minnesota

The concentrations of copper, iron, sulfate, or hardness in the public water supplies are a concern for a number of communities in Southwestern Minnesota. To assist communities concerned about those problems in water, this study used the contingent valuation method to determine how much consumers would be willing to pay to improve their drinking water quality and what factors influence consumers' willingness-to-pay (WTP). To elicit this information a mail questionnaire was sent to a randomly selected sample of 910 residents who receive their water from one of the public water supply systems in Southwestern Minnesota. All of the communities selected for the survey had levels of iron, sulfate, hardness or copper above the desired standards. The survey resulted in 70% response rate with 640 completed questionnaires.;The survey results showed that about three-quarters of the respondents considered their community's overall water quality to be fair or better. However, 45% of the respondents found their water to be hard and 35% were concerned about the level of copper contamination. Individuals were willing to pay ;To better understand how individual's perception of water quality and socio/demographic characteristics affect the WTP, Probit and Censored Tobit analyses were used. The results show that higher income, housing values, and education level significantly increase consumer's WTP. However, the WTP is negatively related to higher water bills. In addition, respondents with negative perceptions of their drinking water quality in terms of taste, odor, color, softness, and safety were willing to pay more to improve water quality.