Willing To Pay But Unwilling To Charge A DO WILLINGNESS-TO-PAY STUDIES MAKE A DIFFERENCE?

studies, coupled with practical experience on the ground, have shown that many urban and rural communities are willing to pay for social infrastructure such as water and sanitation. Figure 1 illustrates the results of a 1996 survey in Dehradun which clearly shows that a high percentage of households are willing to pay more than the current tariff for an improved water supply service. There is growing evidence that many urban and rural communities are willing to pay more than the prevailing rates for water and sanitation, to ensure a better or more reliable service. However, governments seem unwilling to match this with a willingness to charge consumers for these services and the result is a continuing cycle of low revenues, high costs, unsatisfactory services and financial crisis. Despite evidence from a range of thorough and well designed surveys to assess willingness to pay, this resistance to increasing tariffs persists. This Field Note explores the approaches to assessing willingness to pay, examines the evidence of previous willingness-to-pay surveys carried out in India and takes a critical look at the experience of such surveys in influencing policy change. Clearly, carrying out good surveys is not enough and more efforts need to be made in building capacity for effective policy development. But the authorities in Dehradun have not responded to the evidence of this survey by increasing the tariffs to capture the potential additional revenues it has revealed. Policy makers frequently refrain from raising tariff rates fearing that the people will not want to pay. Credible estimates of willingness to pay and other means of assessing demand could be used to demonstrate that the people are already paying much more than the official tariff rat