Valuing Water Service Reliability and In-Home Water Infrastructure : A Hedonic Price Model from Guatemala

In many developing countries, water service interruptions are often the norm, imposing considerable costs on water users. As evidence of users’ demand for improved water services, an increasing number of households invest in in-home water storage infrastructure. Using a unique primary dataset from Guatemala City (n=567), we estimate hedonic models of rental prices to derive marginal values of fewer water service interruptions and in-home water storage infrastructure. Our findings indicate that, on average, rental prices decrease by 0.7% with each day of water service interruptions and increases 10% for housing units with storage infrastructure relative to those without it