Household preferences for improved water services in the Galapagos Islands

Like many islands worldwide, Santa Cruz, the most populated of Ecuador's Galapagos Islands, has limited resources to provide safe drinking water to an increasing number of inhabitants and tourists. Currently, households receive brackish water at their tap, which is rationed to a few hours per day. Insufficient recovery of water supply costs is an impediment to improving water services. Against this backdrop, we implemented a contingent valuation survey to investigate whether households are willing to pay for improved water services. Using split-sample scenarios that allow for scope and part-whole tests, we elicited household preferences for three improvements: 1) uninterrupted water supply, 2) drinkable tap water, and 3) combining both. Our estimation results indicate that households are willing to pay for safe drinking water. Conversely, our willingness-to-pay estimates suggest that households are indifferent about improvements of service reliability unless water quality is improved as well. The median willingness to pay for concurrent improvements of system reliability and water quality is estimated at approximately $36/month, about 2.1% of average monthly household income. This study has policy implications as it demonstrates that households deem system reliability and water quality as complementary improvements.