Unpackaging demand for water service
            quality : evidence from conjoint surveys in Sri Lanka
WPS3817

# **Unpackaging Demand for Water Service Quality: Evidence from Conjoint Surveys in Sri Lanka**

**Jui-Chen Yang, Subhrendu K. Pattanayak, F. Reed Jonson, Carol Mansfield,**

**Caroline van den Berg, and Kelly Jones**<sup>♠</sup>

### Abstract

_In the early 2000s, the Government of Sri Lanka considered engaging private sector operators to manage water and sewerage services in two separate service areas: one in the town of Negombo (north of Colombo), and one stretching along the coastal strip (south from Colombo) from the towns of Kalutara to Galle. Since then, the government has abandoned the idea of setting up a public-private partnership in these two areas. This paper is part of a series of investigations to determine how these pilot private sector transactions (forming part of the overall water sector reform strategy) could be designed in such a manner that they would benefit the poor._ _This paper describes the results of a conjoint survey evaluating the factors that drive customer demand for alternative water supply and sanitation services in Sri Lanka. We demonstrate how conjoint surveys can be used to un-package household demand for attributes of urban services and improve the design of infrastructure policies. We present conjoint surveys as a tool for field experiments and source of valuable empirical data. In our study of three coastal towns in southwestern Sri Lanka the conjoint survey allows us to compare household preferences for four water supply attributes – price, quantity, safety, and reliability. Sub-populations of poor and non-poor households are examined to determine if demand is heterogeneous. Our case study suggests that households care about service quality (not just price). In general, we find that households have diverse preferences in terms of quantity, safety, and service options, but not with regard to hours of supply. In particular we find that the poor have lower ability to tradeoff income for services, a finding that has significant equity implications in terms of allocating scarce public services and achieving universal water access._

## World Bank Policy Research Working Paper 3817, January 2006

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent. Policy Research Working Papers are available online at http://econ.worldbank.org._

> ♠ Subhrendu K. Pattanayak is a Fellow, RTI International (subrendu@rti.org). Jui-Chen Yang and Kelly Jones are Associate Economists at RTI International. Reed Johnson is a Senior Fellow at RTI International. Caroline van den Berg is a Senior Economist in the Energy and Water Department of the World Bank. Carol Mansfield is a Senior Economist at RTI International.