Water source as a housing characteristic: Hedonic property valuation and willingness to pay for water

Abstract

Using data from a large representative sample of rural households in one region of the Philippines, we estimate the determinants of the rental value of dwellings using the bid‐rent approach to the hedonic price model. Our particular interest is in the relative valuation these households place on owning a private source of water and distance to a public or communal source. We find that low‐, middle‐, and high‐income households value an in‐house piped water source highly relative to other characteristics of their homes. Middle‐ and high‐income households value a deep well or piped water in the yard, although at a substantially lower level than piped water in the house. It is somewhat surprising to find that, except in the case of high‐income families, households appear to gain little or no utility from having a communal source of water, such as a river, lake, or public tap, closer to their homes. As a consequence, public water policies that emphasize improving the quality and proximity of communal sources would be inappropriate for the region represented by this sample.