Rural piped water connection project – Time preference elicitation experiment

OVERVIEW

In Vietnam’s Red River Delta, the Government has been investing in the construction of large distribution networks using safe, arsenic-free water sources to increase access to sustainable clean water supply and foster equity. The suitability of these piped water schemes as a long term solution to arsenic mitigation hinges on financial contributions from local households. Piped water connection fees and monthly usage tariffs are structured to recover a portion of the cost of capital infrastructure as well as on-going operations and maintenance expenditures. However, the availability of cheap, convenient, and often free alternatives, along with low awareness of arsenic contamination has limited demand for piped water. Water pricing guidelines fail to take into account household valuation of clean water, availability of alternatives, and the potential negative externalities associated with continued private groundwater pumping. As a result, take-up and monthly usage conditional on take-up are far lower than desired and insufficient to achieve cost recovery targets, thus threatening the sustainability of the systems.

One activity of the study consists of conducting a field experiment to elicit household time preferences in My Huong commune. Time preferences are a key determinant of household decisions to connect to the piped water supply scheme.