Hydraulic ram pumps and Sling Pumps

Key Factors for Sustainable Cost RecoveryAnalysing potential behaviourThe indirect approach draws conclusions about potential behavioural changes that an improved systemis likely to bring in relation to WTP. This approach draws part of its conclusions from responses tohypothetical questions. Some of these tools can be complex in their application and requireexperienced professionals.• Benefit Transfer MethodologyAccording to Boyle and Bergstrom (cited by Brookshire, 1992) benefit transfer is “the transfer ofexisting estimates of non-market values to a new study which is different from the study for which thevalues were originally estimated”. In other words, the behaviour of a group that already has beenstudied is projected onto a second group to predict the second group’s willingness to pay for the goodor service in question (Briscoe et al, 1995). The strategy of benefit transfer depends on the validity ofmodels used to extrapolate from behaviour or valuation of benefits in one area to populations ofknown characteristics in other areas. The application of benefit transfer studies should be donefollowing three criteria: 1) population characteristics should be similar for both areas; 2) the nonmarketcommodities have to be the same, and 3) the researcher cannot switch welfare measurementsfrom willingness to pay to willingness to accept.Advantages and disadvantages of benefit transfer methodologyAdvantagesDisadvantages• May reduce the biases of the contingentvaluation method because it does not usesurveys• Comparison across time without new information isproblematic, since observed variables in the equationmay have changed• Requires little additional data collection • The estimates are valid only for the range of• It is cheaper because it does not require along fieldworkvariables occurring in the sample observed in thefirst site• Produces quick information abouthousehold’s WTP• Predictable component of behaviour may beoverwhelmed by unobservable effects• It does not consider household opinions• Hypothetical behaviour studies (contingent valuation method)Another approach is to ask users directly what would be their choice given a specific price, termed thecontingent valuation (CV) method, since user responses are contingent, or dependent on predeterminedconditions. As Whittington (1998) pointed out the CV studies “try to determine themaximum amount the respondents would be willing to pay for the proposed (or hypothetical) good orservice in the context of the existing institutional regime within which individuals are free to allocatetheir personal financial resource”. WTP surveys frequently include three parts:1) socio-demographic information collection about users (education, family size, education, workcategory, and so on;2) information collection about the project (benefits, costs, level of service, way of payment,financing) and WTP; and,3) economic situation of users (incomes, expenditures, sources of incomes and expenditures, etc) aswell as their perception about the provision of the good or service.Once the survey is carried out, models are used to estimate benefits via a demand function, used toderive an individual’s maximum willingness to pay. By varying the price and assessing the demandresponse, price and demand elasticity ratios can be determined. Data availability and (perceived) nonrationalbehaviour severely limits this approach in rural areas (See Annex 6 for an example of ahypothetical behaviour study).19