Willingness-to-Pay for Alternative Shortage Probability Distributions

by Jay R. Lund, (A.M.ASCE), Univ of California, Davis, United States,



Document Type: Proceeding Paper

Part of: Water Policy and Management: Solving the Problems

Abstract:

Mathematical programming is used to derive estimates of the willingness-to-pay of water service customers for improvements in water supply reliability. Reliability is represented as a probability distribution of different shortage levels, allowing the valuation of different profiles of water supply reliability. The approach can be applied to estimate willingness-to-pay for different classes of customers and land-uses to improve estimates of reliability valuations or for the design of promising water conservation programs for different customer classes. An example illustrates the approach.

Subject Headings: Water shortage | Water supply | Water conservation | Probability | Client relationships | Probability distribution | Mathematics

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