We examine households' demand for improved water services in Kathmandu, Nepal, where the government is considering the possibility of involving the private sector in the operation of municipal water supply services. We surveyed a randomly selected sample of 1500 households in the Kathmandu Valley and asked respondents questions in in-person interviews about how they would vote if given the choice between their existing water supply situation and an improved water service provided by a private operator.
The results provide the first evidence from South Asia that households' willingness to pay for improved water services is much higher than their current water bills. We find substantial public support among both poor and nonpoor households for a privatization plan that would improve water supply and require all participants to pay regular and higher monthly bills.
