Estimating household willingness to pay for water services in a rural economy: The case of Kanye in southern Botswana

Figures & data

Table 1: Coverage of water service in urban and rural areas of Botswana (population in thousands)

Water supply	Population	Population with private connection	Population with public standpoint	Population served	Population not served
Urban water	815	494	111	815	0
Rural water	807	61	551	N/A	N/A
Total population served with water	1 622	555	662	N/A	N/A
Source: Stone and Webster Consultants, Appropriate Regulatory Reforms for Infrastructure and Utility Services in Botswana, report submitted to World Bank and Public Enterprises Evaluation and Privatization Agency (PEEPA), January 2005.

Table 2: Financial operation performance indicators of Botswana Water Utilities Corporation

Indicator	1999	2000	2001	2002	2003	2004
Average consumption (m^3/customer/month)		61	58	54	58	55
Average tariffs (pula/billed m^3)	4,74	5,31	6,22	7,62	9,34	10,75
Operating cost recovery ratio	225%	266%	242%	261%	307%	365%
Capital cost recovery ratio				113%	134%	136%
Total debt/equity ratio				0,74	0,63	0,53
Cash flow from operations (P'000)				80 457	157 586	239 054
Source: Stone and Webster Consultants, Appropriate Regulatory Reforms for Infrastructure and Utility Services in Botswana, report submitted to World Bank and PEEPA, January 2005.

Table 3: Tariff schedule for WUC – domestic and business customers 2003/2004

Tariff band	Consumption per month (m^3)	Gaborone/Lobaste (thebe/m^3)	Jwannag (thebe/m^3)*	Francistown (thebe/m^3)	Selebi/Phikwe (thebe/m^3)
1	0–10	210 (190)	165 (150)	240 (190)	165 (150)
2	11–15	640 (580)	330 (300)	575 (460)	265 (240)
3	16–25	815 (740)	430 (390)	840 (670)	330 (300)
4	Above 25	1 130 (1 025)	495 (450)	940 (750)	430 (390)
Rural water (untreated)		330 (300)	N/A	200 (160)	235 (215)
Source: Stone and Webster Consultants (2005) Appropriate Regulatory Reforms for Infrastructure and Utility Services in Botswana, report submitted to World Bank and Public Enterprises Evaluation and Privatization Agency (PEEPA), January 2005.
Notes: Figures in parenthesis are the tariffs for 2002/2003 financial year. *Note that 100 thebe equal one pula, the Botswana unit of currency.

Table 4: Water-related disease cases in Botswana: 1990–1997

	1990		1991		1992		1993		1994		1995		1996
	C	D	C	D	C	D	C	D	C	D	C	D	C	D
Malaria	2 027	1	1 942	2	502	2	15 462	54	5 164	8	2 338	16	25 497	124
Diarrhoea	53 420	48	58 330	36	45 619	52	61 591	64	66 950	51	93 178	35	104 664	43
Typhoid													1	1
Source: Ministry of Health (1990–2000).
Notes: C = cases; D = deaths. Only confirmed cases are tabulated.

Table 5: Variables, units of measurement and expected signs

Variable	Unit of measurement	Expected sign
Income	Money (pula)	>0
Household size	Number	<0
Education	Years	0
Age	Years	??
Relative distance from existing sources	Kilometres	>0
Employment status	Dummy 1 if the respondent is employed and 0 otherwise	>0
Gender	Dummy 1 = male 0 = female	<0
Awareness of water borne diseases	Dummy 1 = if the respondent is aware and 0 otherwise	>0
Note: ?? Implies that the sign cannot be determined a priori.

Table 6: Descriptive statistics of the respondents

Variable	Mean	SD
Willingness to pay bid	171,50	124,32
Income	1 333,90	217,19
Household size	6,66	2,61
Education	4,89	3,60
Age	44,89	13,70
Distance	0,79	0,29
Employment*	0,74	0,44
Gender*	0,53	0,50
Incidence of water-borne* diseases	0,85	0,43
Note: * Variables specified as dummy.

Table 7: Regression results for WTP for private water connections

Variable	Parameter estimates	SE	t-value
Constant	30,953	46,935	0,659
Income	0,437***	0,057	7,623
Household size	−6,555*	3,654	−1,794
Education	1,456**	0,606	2,403
Age	0,844	0,685	1,231
Distance	11,756***	4,074	2,886
Employment	1,038***	0,288	3,064
Gender	8,101	18,037	0,449
Awareness	0,967***	0,299	3,234
Notes:
N = 135, d.f. = 126; F-statistic = 12,88; R^2 = 0,647.
*Significant at the 10% level; **significant at the 5% level; ***significant at the 1% level.

Stone & Webster Consultants . January 2005 . “ Appropriate regulatory reforms for infrastructure and utility services in Botswana ” . January , Report submitted to World Bank and Public Enterprises Evaluation and Privatization Agency (PEEPA)

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Ministry of Health . 1990–2000 . Health statistics reports , Gaborone, Botswana : Central Statistics Office . (various issues)

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