Out of sight out of mind: “Reasonable” bills for water and sanitation services.

In order for utilities to provide high quality water and sanitation services to growing urban populations, they must have a sufficient and stable revenue stream. Utilities must price water and sanitation services to cover the cost of delivering services to existing customers and to invest in expanding the network to reach those who currently lack access to them. The vast majority of utilities in low- and middle-income countries price water and sanitation far below the full cost of providing these services. As a result, utilities will need to increase prices substantially to put utilities on the path to financial sustainability. This will be politically difficult for at least two reasons. First, customers have become accustom to low prices and increased prices are likely to be perceived as a loss. Second, unlike other infrastructure such as roads and electricity, much of the infrastructure required to provide water and sanitation services (e.g., dams, pipelines, treatment plans, pumping stations, and pipes) is out of public sight, which may limit customers appreciation of the capital intensity of water and sanitation service delivery. Building on recent literature on customer perceptions of reasonable water bills, this study seeks to test whether providing customers information about the water and sanitation infrastructure affects their perceptions of what constitutes a reasonable bill for water and sanitation services. In particular, the information treatment in the study (a verbal description of the infrastructure required to deliver water and sanitation services in the study location) will be administered to half the respondents in a telephone survey (n=1000) residential customers’ perceptions of reasonable water bills.