Thesis, Undergraduate (B.S. Agribusiness Economics)--University of the Philippines, Mindanao

Water districts are mandated to provide safe and portable water in different local units in the Philippines. One of which is the Tagum Water District (TWD) in Davao del Norte. Results from the bacteriological quality test done by Provincial Health Office indicated that the water from TWD is unsatisfactory because of the presence of E. coli. Improving the water quality necessitates financing to cover cost. This study used the anchored open-ended approach to contingent valuation to determine the willingness to pay (WTP) of households for the improvement of water quality in Tagum City. It was found that the surveyed households are willing to pay PhP 40.93 on average. Results from the logit model suggest that when respondents were offered higher bids, the probability of having a positive response on the dichotomous choice question decreases. From the Tobit model, it was found that the bid has a significant positive effect on the WTP verifying there is anchoring bias. An introduction of higher bid would cater higher stated maximum WTP from households. Moreover, this study found that age, income, water bill, perception on the presence of bacteria and chemicals on the tap water, bottled water expenditure, and trust on the local government to manage the funds, are the main factors that affect the WTP for improved water quality. It is recommended that the water district should consider improving the water quality given the most households have trust on their management. For future researchers, a recommendation from this study is to further elicit willingness to pay for improved water service as nearly half (45%) of the respondents reported experiencing supply problem.