willingness to pay research project - monash...
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1 This document is a copy of the research report for posting on Michael Ward’s personal academic webpage
(http://users.monash.edu.au/~mward/). Michael Ward’s affiliation changed to Monash University after this
report was completed.
The Australian National University
Willingness to pay research project Final report1
Prepared for ACTEW Corporation by: Dr. Ben J. McNair Dr. Michael B. Ward 20/03/2012
Acknowledgements
The authors thank Professor Riccardo Scarpa for expert peer review, Taverner Research (particularly
Connie Jansen) for recruitment of research participants, Russell Pizel for online survey
implementation, and David Hensher for assistance with NLogit econometric software.
Foreword
This document reports on independent research undertaken by the Australian National University
(ANU). Dr Michael Ward, a full-time employee of the ANU, was the Chief Investigator with final
authority over all research project decisions. ACTEW and ActewAGL are industry partners in the
research in an arrangement akin to an Australian Research Council Linkage Grant. They provided
funding through their donations to the Endowment of Excellence at the ANU and contributed in-kind
support by way of salary for a research team member, Dr Ben McNair. Dr McNair was physically
separated from the industry partner when conducting this research in his office in the Crawford
School of Economics and Government. Dr McNair did not discuss data analysis or results with the
industry partner staff without Dr Ward’s involvement and consent. While feedback from the industry
partners was welcome, the industry partners had no control over research design or analysis. An
independent expert peer reviewer, Professor Riccardo Scarpa, has verified the quality of the
research.
Contents
EXECUTIVE SUMMARY I
BACKGROUND I
SUMMARY OF RESULTS I
1 INTRODUCTION 1
1.1 BACKGROUND 1
1.2 OBJECTIVES 1
1.3 CHOICE SURVEYS 2
1.4 OUTLINE OF THIS REPORT 3
2 CONSTRUCTING THE SURVEY INSTRUMENT 4
2.1 CONSULTATION WITH ACTEW 4
2.2 FOCUS GROUPS AND IN-DEPTH INTERVIEWS 7
2.3 EXPERT PEER REVIEW 8
2.4 THE INSTRUMENT USED IN THE MAIN SURVEY 9
2.4.1 ATTRIBUTES AND LEVELS 10
2.4.2 INVESTIGATING EXTERNALITIES AND THE EFFECTS OF SOCIAL INTERACTION 13
2.4.3 CONTROLS 13
3 SURVEY FIELDWORK 15
3.1 RECRUITMENT 15
3.2 SAMPLE CHARACTERISTICS 16
4 RESULTS 20
4.1 ESTIMATES OF WILLINGNESS TO PAY 20
4.1.1 OVERVIEW 20
4.1.2 SELECTING THE SAMPLE FOR ESTIMATION 20
4.1.3 CHOICE MODELS 23
4.1.4 WILLINGNESS TO PAY 25
4.1.5 COMPARISON WITH NERA AND ACNIELSEN 2003 29
4.2 PREFERENCES FOR GOVERNMENT WATER USE 29
4.3 ATTITUDES TOWARDS WATER RESTRICTIONS AND PRICING 30
APPENDIX A: TELEPHONE INTERVIEW SCREENER 35
APPENDIX B: EMAIL INVITATION 45
APPENDIX C: WATER QUESTIONNAIRE 48
APPENDIX D: WATER EXPERIMENTAL DESIGNS 69
APPENDIX E: PEER REVIEW 77
GLOSSARY 79
REFERENCES 80
Willingness to pay research project i
Executive Summary
Background In March 2011, the Australian National University (ANU) commenced an independent research
project, funded by ACTEW and ActewAGL through their donations to the ANU Endowment of
Excellence, focussing on demand for water supply security and energy supply reliability.2 The project
was undertaken by Dr Ben McNair and Dr Michael Ward, with expert peer review by Professor
Riccardo Scarpa of University of Waikato. The primary objective of the study was to estimate the
amounts of money that households in the Australian Capital Territory (ACT) are willing to trade for
changes in water supply security, and electricity and gas supply reliability. This report focuses on the
water component of the study. It details the data collection process undertaken by the ANU
research team and outlines the main results from data analysis.
The values placed by households on the various service attributes of interest were elicited using
choice surveys. Choice surveys involve presenting respondents with one or more choice questions,
where each choice question presents two or more scenarios with specified cost and asking the
respondent to indicate their preferred option. The scenarios are described by multiple attributes and
the levels assigned to attributes vary over scenarios and over questions to provide the variation
necessary for statistical estimation of the value placed by respondents on marginal changes in each
attribute.
This research builds on two previous studies of willingness to pay for water supply security in the
ACT. In 1997, the Centre for International Economics undertook one of the first applications of
choice modelling surveys to utilities in Australia, focussing on the environmental costs of various
options for addressing future supply-demand imbalance (Centre for International Economics 1997).
In 2003, NERA Economic Consulting and ACNielsen undertook choice surveys of ACTEW and
ActewAGL customers across a range of utilities service attributes, including attributes relating to
water supply security (NERA Economic Consulting and ACNielsen 2003). Where relevant, the results
from the NERA and ACNielsen study are compared to those from the present research project with a
view to understanding the way in which customer preferences may have changed over time.
Summary of results Attitudes towards water restrictions and willingness to pay (WTP) to avoid restrictions vary
considerably across households in Canberra. However, a clear finding is that most households care
about how others are using water. In particular, households evidenced a strong desire for fairness
and conformity in the way water is used.
While almost all households enjoy seeing green gardens in their neighbourhood when restrictions
are not in place, less than half get this enjoyment when restrictions are in place. Even when
2 The project was agreed by ACTEW, ActewAGL and the ANU following an application for a research grant by Dr
Ben McNair and Dr Michael Ward of the Crawford School of Economics and Government at the ANU in January
2011.
ii McNair, B. J. and Ward, M.B.
restrictions are not required for water security reasons, there is majority support for regulation of
water use, with around three in four households supporting the permanent imposition of water
conservation measures. On average, households even prefer Stage 1 restrictions to a situation with
no restrictions and are willing to pay an additional amount each year to ensure some low-level
restrictions are in place.
Households are opposed to higher-level restrictions. In particular, households evidenced a strong
aversion to the risk of Stage 4 restrictions and are willing to pay around $200 each year on average
to reduce the likelihood of Stage 4 restrictions by five percentage points (see Figure 1). The average
willingness to pay for five percentage point reductions in the likelihood of Stage 2 and Stage 3
restrictions are around $20 and $70 per year.
Figure 1: Average willingness to pay to avoid a five percentage point increase in likelihood of restrictions
relative to water conservation measures (dollars per annum)
These estimates can be used to quantify the benefits to households from improvements in supply
security. A comparison of these benefits with estimates of the cost to households from improving
the level of supply security shows that households want an increase in supply security (over levels
estimated during the drought) and they are willing to pay for it. ACTEW may find it useful to
incorporate these WTP estimates within its existing cost-benefit analysis framework to assess
decisions on potential investments in supply security.
Turning to a comparison with the 2003 study by NERA and ACNielsen, our results confirm the 2003
finding that households are unwilling to pay to avoid low-level restrictions (water conservation
measures and Stage 1 restrictions). In fact, households now prefer low-level restrictions to a
situation with no restrictions. However, households are now more opposed to higher-level
restrictions than they were in 2003 and are willing to pay more to avoid them.
0
50
100
150
200
250
Stage 1 Stage 2 Stage 3 Stage 4
Willingness to pay research project iii
Households’ desire for fairness and conformity in water use was further demonstrated by a group of
survey respondents who were asked to consider a situation in which ACTEW offered tariff options
that would allow individual households to pay a higher price and face fewer restrictions or pay a
lower price and face more restrictions. Only around one quarter of households thought such a policy
should be introduced. There appears to be some social stigma associated with choosing higher-
security options, with most households agreeing they would think poorly of those choosing a higher-
security tariff and that they expect others would feel the same way.
Consistent with these attitudes, average WTP to avoid higher-level water restrictions was lower
when the scenarios in the choice tasks were described as tariff options rather than community-wide
options (see Figure 2). Households’ WTP for low-level restrictions was lower when questions were
described as tariff options, suggesting that part of the benefit households obtain from low-level
restrictions is derived from preventing other households from using water in ways that they perceive
to be wasteful.
Figure 2: Average willingness to pay to avoid a five percentage point increase in likelihood of restrictions
(dollars per annum)
On average, households want the burden of water conservation to be shared between public and
private spaces. The median view of households is that half of ovals, sports grounds, parks and public
spaces should be allowed to brown off when Stage 2 restrictions are introduced, with the remaining
half allowed to brown off when Stage 3 restrictions are introduced. Households placed a relatively
high value on watering of street trees, with a median view that street trees should only be allowed
to die due to drought once Stage 3 restrictions have been imposed.
-50
0
50
100
150
200
WCM Stage 1 Stage 2 Stage 3 Stage 4
Community-wide Tariff options
iv McNair, B. J. and Ward, M.B.
Willingness to pay research project 1
1 Introduction
1.1 Background In March 2011, the Australian National University (ANU) commenced an independent research
project, funded by ACTEW and ActewAGL through their donations to the Endowment of Excellence,
focussing on demand for urban water supply security and energy supply reliability.3 The project was
undertaken by Dr Ben McNair and Dr Michael Ward, with expert peer review by Professor Riccardo
Scarpa of University of Waikato. The primary objective of the study was to estimate the amounts of
money that households in the Australian Capital Territory (ACT) are willing to trade for changes in
water supply security, and electricity and gas supply reliability. This report focuses on the water
component of the study. It details the data collection process undertaken by the ANU research team
and outlines the main results from data analysis.
This research builds on two previous studies of willingness to pay for water supply security in the
ACT. In 1997, the Centre for International Economics undertook one of the first examples of a choice
modelling survey in Australia, focussing on the environmental costs of various options for addressing
future supply-demand imbalance (Centre for International Economics 1997). In 2003, NERA
Economic Consulting and ACNielsen undertook choice surveys of ACTEW and ActewAGL customers
across a range of utilities service attributes, including attributes relating to water supply security
reliability (NERA Economic Consulting and ACNielsen 2003). Where relevant, the results from the
NERA and ACNielsen study are compared to those from the present research project with a view to
understanding the way in which customer preferences may have changed over time.
1.2 Objectives The broad objective is to understand customer preferences with respect to the trade-off between
improved water supply security and higher water bills. In particular, the aim is to understand
customers’ WTP for the following service attributes:
a) the frequency of water restrictions; and
b) the severity of water restrictions.
While estimates of households’ WTP are of interest on their own, the primary benefits to be gained
from the study are in the comparison of these estimates with the marginal costs (or cost savings)
from changing service attributes. ACTEW may find it useful to use these results in cost-benefit
analysis as they have with past WTP studies to identify the investments that would achieve a
sustainable balance between demand and supply in the long term at the lowest cost to the
community.
3 The project was agreed by ACTEW, ActewAGL and the ANU following an application for a research grant by Dr
Ben McNair and Dr Michael Ward of the Crawford School of Economics and Government at the ANU in January
2011.
2 McNair, B. J. and Ward, M.B.
1.3 Choice surveys The natural monopoly nature of urban water provision and indivisibilities in the services mean that
consumers are rarely able to choose their preferred version of the service. Consumers are only
offered one version of the service for a given property. In general, it is not possible to observe
households trading off price against supply security in a real market; but, these trade-offs can be
observed in the context of a choice survey.
Choice surveys, particularly those employing conjoint analysis or choice modelling techniques, are
increasingly being used to understand consumers’ preferences for utilities services (for example,
Accent 2003; Accent 2008; Carlsson and Martinsson 2008; Kelly and Alford 2010; KPMG 2003;
McNair et al. 2011; NERA Economic Consulting and ACNielsen 2003; Willis et al. 2005) and as an
input to economic regulation – either as a means of quantifying benefits for cost-benefit analysis of a
given project (for example, Centre for International Economics 2008) or to set the incentive rates
(financial rewards and penalties) for under- or over-performance on various service attributes
(Ajodhia 2006; Giannakis et al. 2005; Netherlands Competition Authority 2006).
Choice surveys involve presenting respondents with one or more choice questions, where each
choice question presents two or more hypothetical scenarios with specified cost and asking the
respondent to indicate their preferred option. In choice modelling, the scenarios are described by
multiple attributes and the levels assigned to attributes vary over scenarios and over questions to
provide the variation necessary for statistical estimation of the value placed by respondents on
marginal changes in each attribute.
A choice survey provides an opportunity to observe choices that do not or cannot be observed in
real markets. A criticism sometimes levelled at choice surveys is that they simulate a market that is
hypothetical and therefore may not replicate the financial constraints confronted by consumers in
real markets. However, the extent of this disadvantage depends on the nature of the survey
mechanism. Financial constraints may be absent if a respondent believes that their response will
have no influence on the agency’s actions or if they believe the agency would not be able to enforce
payment. However, if a respondent believes that their response may (up to some non-zero
probability) influence the agency’s actions and that the agency could enforce a policy outcome
(including payment) based on their response, then the survey becomes a real market transaction of
sorts and financial constraints are present.4 Fortunately, when surveys are carefully designed in the
utilities services context, respondents are likely to fall into the latter category rather than the
former.
4 A hypothetical survey is consequential if respondents believes their responses will influence up to some non-
zero probability the likelihood of an alternative being implemented by the agency (Carson and Groves 2007).
Economic theory predicts that responses to a consequential hypothetical survey and a survey with immediate
and certain implementation will be equivalent. Consistent with this theory, Carson et al. (2006) found a
difference between responses to inconsequential hypothetical questions and questions involving 100 per cent
probability of actual payment, but, importantly, found equivalence in responses to all questions involving a
non-zero (20 per cent, 50 per cent, 80 per cent and 100 per cent) probability of actual payment.
Willingness to pay research project 3
In the present study, most respondents were informed by experience as to how water restrictions
would affect their household and most respondents believed that the results would influence
ACTEW operations, as evidenced by responses to specific survey questions as well as the media
coverage of the survey on 11 October 2011 and subsequent public debate. Respondents were
excluded from the choice models where they indicated they had answered a different question from
that being asked. As a result, we have confidence in the study’s findings.
The design of the hypothetical choices in terms of the levels of service attributes allocated to
competing alternatives determines the information that will be gathered. It is important that choice
questions are designed carefully to ensure that the trade-offs required to estimate values for each
attribute are induced. Modern techniques in experimental design allow the analyst to do this in a
way that maximises the statistical significance of the estimation results for a given sample size.
1.4 Outline of this report Section 2 of this report details the process of constructing the survey instrument, including
consultation with ACTEW and testing in focus groups and in-depth interviews. The service attributes
and associated levels used to describe scenarios in the choice questions are set out in this section.
Section 3 of the report describes the survey fieldwork, including the recruitment of participants and
the characteristics of the sample. The results of analysis of the survey responses are presented in
Section 4.
4 McNair, B. J. and Ward, M.B.
2 Constructing the survey instrument The survey instrument used in this study was constructed through several phases of careful planning
and testing. When constructing the survey instrument, considerations included the following.
1. The number of alternatives to be included in the choice questions (and whether one of the
alternatives should characterise the status quo);
2. The service attributes to be included in the choice questions and how those attributes
should be defined;
3. The levels that the service attributes can take in the questions and whether these levels
should vary across respondents on the basis of respondent characteristics;
4. The number of questions to be answered by each respondent;
5. The combinations of attribute levels in each question (that is, the experimental design); and
6. The order in which questions are presented to each respondent.
The construction of survey instrument was informed by consultation with ACTEW, testing in focus
groups and in-depth interviews, advice from expert peer reviewer Professor Riccardo Scarpa, and
pilot survey responses. Each of these phases is discussed in turn in the following sections.
2.1 Consultation with ACTEW In early April 2011, the ANU provided a plan document outlining a proposed approach to the project,
focussing on the information to be sought from customers, the design of the surveys to elicit that
information, and the practical means by which the surveys would be undertaken.
The ANU research team proposed that the survey employ a different choice design to that used by
NERA in 2003 to reflect developments in the restrictions regime taking place over the intervening
period. In the NERA and ACNielsen study, restrictions are defined by both ‘level’ and ‘types of days
that water restrictions apply’. This definition led to scenarios in which restrictions are applied every
second day (see Package B in Figure 3). It is no longer consistent with the way in which restrictions
are applied. Stage 3 restrictions are based on an ‘every second day’ approach, but the approach
involves alternating daily between a total ban and morning and evening watering, rather than
alternating between unrestricted use and morning and evening watering as the choice tasks used in
2003 imply. The preference information revealed by the pioneering NERA and ACNielsen survey
allows us to generate an experimental design (combinations of service attribute levels) that elicits
preferences more efficiently (that is, a design that requires a smaller sample size to achieve a given
level of statistical significance in estimation).
Willingness to pay research project 5
Figure 3: Example of choice task from NERA 2003 survey
The ANU research team developed a set of attributes based on the existing restrictions regime.
Respondents were expected to be well informed about the regime as a result of its enforcement
over the previous eight years. This familiarity with the consequence component of the water
shortage risk allowed the design to focus on the probability component of the risk – something that
is otherwise difficult to achieve in a choice survey. This allowed the service scenarios to be defined in
quite realistic terms that characterise trade-offs that closely resemble those considered by ACTEW in
its water security planning. The attributes and associated levels used in consultation with ACTEW are
presented in Table 1.
6 McNair, B. J. and Ward, M.B.
Table 1: Attributes and associated levels for consultation with ACTEW
Attribute Level
Expected number of years
spent in each level of
restrictions over the next 30
years:
Water conservation measures 6, 10, 14
Stage 1 2, 4, 6
Stage 2 2, 4, 6
Stage 3 0, 2, 4
Stage 4 0, 1, 2
Your ongoing annual water and sewerage bill (proportion of
current bill)
0.90, 0.92, 0.94, 0.96, 0.98,
1.00, 1.02, 1.04, 1.06, 1.08,
1.10, 1.12
The draft choice questions constructed from these attributes and levels and used as a basis for
consultation were constructed in a binary choice format with no status quo option and annual bill
amounts pivoted on the respondent’s perception of their own annual bill. These aspects of the
design were later revised following discussion with the project team’s expert peer reviewer.
On 18 May and 23 May 2011, the research team met with ACTEW and ActewAGL representatives.
The following points were raised:
ACTEW indicated that it would be useful to separately value restrictions on government use
and the resulting impacts on ovals, parks, and street trees.
ACTEW questioned whether the increments in the price levels chosen for the experimental
design were too small. It was agreed that this could be tested in focus groups and fine-tuned
after the pilot survey.
ACTEW questioned whether the supply security scenarios should include periods of no
restrictions given that current government policy is that Water Conservation Measures will
apply permanently. It was agreed that Water Conservation Measures should not be treated
as permanent for the purpose of the survey to allow the effect of the measures to be
estimated. However, ACTEW suggested that the choice tasks specify the number of years
without restrictions so that the number of years sum to the same total in every case.
The research team agreed to include in the final survey questions about respondents’ preferred
timing for the introduction of various types of restrictions on government water use relative to the
timing of the introduction of the various stages of household restrictions. The price increments used
in the choice design were carefully adjusted on several occasions, including twice as part of the
adaptive experimental design approach used in the survey to cover the range of WTP (or willingness
to accept) implied by responses in the survey to that point. The number of years in “no restrictions”
was included as an attribute in the choice questions so that the sum of years across all attributes
was equal to 20 in every question.
Willingness to pay research project 7
2.2 Focus groups and in-depth interviews On 28 July and 1 August 2011, the ANU conducted two focus group sessions with a total of eleven
participants at the Colmar Brunton offices in Yarralumla. The main purpose of the sessions was to:
1. assess clarity and interpretation of draft questionnaires;
2. investigate how attitudes towards restrictions on use, infrastructure spending and tariff
options may influence responses to preference questions;
3. investigate how perceptions about how the survey results would be used by ActewAGL may
influence responses to preference questions; and
4. check the level of fatigue and understand whether respondents would complete the
questionnaires if self-administered online.
This process facilitated identification of questions that had been misinterpreted by respondents and
ways of improving those questions prior to fielding the survey. It also provided a richer
understanding of the data collected in the survey itself. This phase of the research was particularly
important in this study because the survey was self-administered online (without an interviewer
present).
The sessions comprised two stages. In the first stage, the participants completed the questionnaire
and, in the second stage, ANU researchers engaged the participants in a conversation exploring the
meaning of specific parts of the questionnaire and how the participant arrived at their answers. The
sessions also included more general discussion about water restrictions, tariff options, government
water use and water prices.
Despite awareness of the Extended Cotter Dam project, almost all participants expected that some
temporary water restrictions would be required over the next 20 years. Almost all participants
indicated they wanted low level restrictions all the time in order to reduce the risk of more severe
restrictions and to reinforce ‘good’ habits. Most participants were fairly negative about the idea of
tariff options that would allow the level of restrictions to vary across households, though some were
positive, particularly about the idea of a ‘budget’ tariff option that would allow households to opt to
pay less and face restrictions more often. Most participants thought that there would be animosity
towards households opting for a high security tariff. Most participants expressed the view that
public spaces, such as parks and sports fields, should continue to be watered even once severe levels
of restrictions are placed on households. Most participants supported the idea of prices being higher
during shortages and lower during times of plenty, but a few participants wanted prices to be stable
over time.5
Some of the main outcomes in terms of constructing the choice questions were as follows.
In line with earlier feedback from ACTEW, some participants in the first focus group
expressed the view that the bill amounts were too similar across options. The water bill level
5 It was later found, in the main survey, that households were evenly split on this issue.
8 McNair, B. J. and Ward, M.B.
differences were doubled in the second focus group. This revision was later judged to have
over-compensated and the increments were adjusted.
Choices appeared to be driven almost solely by either price or Stage 4 restrictions. The
design was subsequently constrained so that in some questions the levels for Stage 3 and
Stage 4 restrictions were equal across alternatives (to force trading on lower levels of
restrictions). The prior coefficient for Stage 4 used in generating the choice design was
increased so that changes in the number of years at Stage 4 would tend to be associated
with larger bill differences in the design.
Part of the reason for the focus on Stage 4 appeared to be an association with the risk of
running out of water altogether. To isolate the WTP to avoid Stage 4 restrictions from the
WTP to avoid this risk of supply exhaustion, a ‘State of emergency’ attribute was included in
choice questions, taking only a zero level.
Colour coding in the graphical representations of the restriction attribute levels and in the
summary of the restrictions regime appeared to be causing an emotional response in some
participants. The colour coding was subsequently removed.
Some participants expressed the view that there was too much information provided below
the choice questions. The table summarising the restrictions regime was subsequently made
available via a link rather than included on the page itself.
The sessions also helped to identify the need to:
make the recruitment screening questions more specific about which types of renters can be
included in the study;
give assurances that accessed past billing records would be used only for this study;
revise the income question to include annual income amounts as well as weekly amounts;
adjust the ordering of instructions for answering choice questions and to include more
headings and dot points in those instructions; and
include questions that will help us to understand how restrictions affected each respondent.
2.3 Expert peer review The final stage of the process of constructing the water survey instrument was to subject the
instrument to expert peer review by Professor Riccardo Scarpa in the week commencing 8 August
2011. The main revisions arising from the advice provided by Professor Scarpa were as follows.
Use of a three-alternative choice format comprising a status quo option fixed across the
design for each respondent to clearly define a reference point that acts as a pivot between
the other two alternatives – a deterioration scenario (offered at a bill discount) and an
improvement scenario (offered at a bill increase). To increase variability, two status quo
scenarios were defined and randomly allocated to respondents.
Willingness to pay research project 9
Defining the monetary attribute as the absolute dollar change in annual bill. This was
preferred to showing the total bill amount due to potential framing effects. Absolute dollar
changes, rather than dollar changes calculated as a function of a respondent’s current bill,
were preferred, despite a loss of design efficiency, due to concerns over endogeneity
potentially created by the correlation between bill amounts and WTP.
Inclusion of a “cheap talk” script to mitigate any hypothetical bias. A “cheap talk” script is a
short paragraph in the questionnaire instructing respondents to answer the hypothetical
questions as though they were real situations.
Increasing the range of bill levels used in the design to cover the WTP level (implied by the
mean of the Bayesian coefficients in the prior utility function) for the largest service
improvement possible in the design.
2.4 The instrument used in the main survey The questionnaire and choice designs used in the survey are set out in Appendix C and Appendix D.
The questionnaire commenced with a letter from the researchers, before providing information on
the purpose of the survey, water restrictions in the ACT, and the trade-offs that exist not only
between cost and time spent in restrictions, but also between the levels of restrictions themselves.
For a split sample of respondents, the questionnaire then provided information establishing a policy
context in which households would be able to choose between tariff options, so that both price and
restrictions imposed may vary across households. Further details of the reasons for this split sample
treatment are provided on page 13. Instructions for answering the choice questions were provided,
including an example choice question, before six choice questions drawn from the choice design
were presented in turn. Several questions were included in the questionnaire to help us to
understand how respondents answered the choice questions, including attribute attendance,
strategic behaviour, consequentiality, plausibility, protest response and attendance to the policy
context. Respondents were then asked questions about the cost of restrictions on government
water use relative to restrictions on household water use and a dozen Likert scale questions relating
to tariff options, externalities and social interactions associated with water use, knowledge of
restrictions, and water pricing. The questionnaire concluded with questions about household water
use and socio-demographic characteristics.
The choice design, which was revised twice during the survey period, comprised 48 choice questions
– 24 using status quo version 1 and 24 using status quo version 2. Each set of 24 questions was
grouped into four blocks of six questions, giving eight blocks overall. Each respondent was assigned
to one of these eight blocks and the questions were presented to the respondent in a randomised
order.
Design revisions focussed on updating the combinations of attribute levels to maximise design
efficiency and on the available levels for the low level restrictions attributes and, particularly, the bill
attribute. The bill attribute levels were adjusted to ensure that they covered the WTP implied by
models run on data collected to that point for the best and worst possible combinations of service
attribute levels in the design. The most significant diversion between the prior utility function used
to develop the initial design and the models run on early survey responses was the strength of
preference for lower level restrictions over an absence of restrictions. As expected, it appeared that
10 McNair, B. J. and Ward, M.B.
this preference was more prevalent where options were presented as community-wide options (as
opposed to where they were presented as tariff options). To capture the trade-offs necessary to
assess whether WTP for lower level restrictions was indeed positive, while at the same time
maintaining plausible budget and high-security tariff options in most questions, a small number of
bill decreases or lower level restriction increases were included in the improvement options, and
conversely for deterioration options.
2.4.1 Attributes and levels
The attributes and levels in the choice design used in the survey are presented in Table 2. Some
attribute levels listed in the table were presented to respondents more often than others over the
course of the survey. This imbalance was partly due to changes in the attribute levels as part of the
adaptive design process and partly due to some levels being intentionally assigned infrequently; for
example, the positive bill changes in the deterioration options and the negative cost changes in the
improvement options were used only in a few choice questions as a means of testing the result
implied by pilot data analysis that households on average would be willing to pay more to have
water conservation measures or Stage 1 restrictions in place rather than no restrictions at all.
Willingness to pay research project 11
Table 2: Attributes and associated levels used in water survey instrument
Attribute Status quo version 1 Deterioration option Improvement option
Expected number of years
spent in each level of
restrictions over the next
20 years:
Water conservation
measures
14 Remainder (range 2 to 15) 2, 8, 14
Stage 1 2 0, 2, 4, 6, 8 0, 1, 2, 4
Stage 2 2 0, 2, 4, 6, 8 0, 1, 2, 4
Stage 3 2 0, 2, 3, 4, 6 0, 1, 2, 4
Stage 4 0 0, 1, 2 0
State of emergency 0 0 0
Your ongoing annual water and sewerage bill (dollar
increase in your current bill)
0 50, 0, -50, -100, -150, -200, -250, -300,
-350, -400
-100, -50, 0, 50, 100, 150, 200, 250
Attribute Status quo version 2 Deterioration option Improvement option
Expected number of years
spent in each level of
restrictions over the next
20 years:
Water conservation
measures
9 Remainder (range 2 to 17) 3, 6, 9, 12
Stage 1 4 0, 2, 4, 6, 8 0, 2, 4, 6
Stage 2 4 0, 2, 4, 6, 8 0, 2, 4, 6
Stage 3 2 0, 2, 3, 4, 6 0, 2, 4
Stage 4 1 1, 2 0, 1
State of emergency 0 0 0
Your ongoing annual water and sewerage bill (dollar
increase in your current bill)
0 50, 0, -50, -100, -150, -200, -250 -100, -50, 0, 50, 100, 150, 200, 250,
300, 350, 400
12 McNair, B. J. and Ward, M.B.
An example of a choice question is presented in Figure 4 along with the graphs that were provided
to assist respondents in comparing the options and the table summarising the restriction regime,
which could be accessed in a pop-up window via a link on the choice question pages of the
questionnaire.
Figure 4: Example of a choice question in the water survey instrument
CURRENT
PACKAGEPACKAGE A PACKAGE B
RESTRICTIONS ON HOUSEHOLD WATER USE
No restrictions 0 0 3
Water conservation measures 9 8 9
Stage 1 4 4 4
Stage 2 4 4 4
Stage 3 2 2 0
Stage 4 1 2 0
State of Emergency 0 0 0
THE COST TO YOUR HOUSEHOLD
$0 $100 $350
If Package A and Package B were the only two options available
to you, which option would you choose?
more than your
current bill
Expected number of years
spent in each level of
restrictions over the next 20
years:
Your ongoing annual water and sewerage bill
If these were the only three options available to you, which option
would you choose?
less than your
current bill
more than your
current bill
0 10 20
State of Emergency
Stage 4
Stage 3
Stage 2
Stage 1
Water conservation
measures
No restrictions
Expected number of years in restrictions
over next 20 years
Current Package
0 10 20
State of Emergency
Stage 4
Stage 3
Stage 2
Stage 1
Water conservation
measures
No restrictions
Expected number of years in restrictions
over next 20 years
Package A
0 10 20
State of Emergency
Stage 4
Stage 3
Stage 2
Stage 1
Water conservation
measures
No restrictions
Expected number of years in restrictions
over next 20 years
Package B
SprinklersHand-held hose, bucket, or
watering canSwimming pools Vehicles
Target annual
reduction in water
use
Water Conservation
Measures
Permitted before 9am or after
6pm every dayPermitted at any time
Pools may be filled or topped
up using hose. Larger pools
must be covered when not in
use.
May be washed using a
bucket, watering can, or hand-
held hose with trigger nozzle
13%
Stage 1
Permitted for 3 hours in
morning and evening every
second day
Permitted at any time
Existing pools may be topped
up using hose. Written
exemption required to fill or
refill
May be washed no more than
once per week using a
bucket, watering can, or hand-
held hose with trigger nozzle
22%
Stage 2
Only dripper systems
permitted for 3 hours in
morning and evening every
second day
Permitted for 3 hours in
morning and evening every
second day
Existing pools may be topped
up for 3 hours in morning and
evening every second day
using hose if covered when
not in use. Written exemption
required to fill or refill
May be washed no more than
once per week using a
bucket, watering can, or hand-
held hose with trigger nozzle
35%
Stage 3 Not permitted
Permitted for 3 hours in
morning and evening every
second day
Written exemption required
for fill, refill, or top up
Permitted only at complying
commercial car wash43%
Stage 4 Not permitted Not permittedWritten exemption required
for fill, refill, or top upNot permitted 61%
State of Emergency Emergency water use only
Willingness to pay research project 13
2.4.2 Investigating externalities and the effects of social interaction
Social interaction is an important consideration when attempting to understand preferences
towards water restrictions. A component of household utility is likely to be related to social status,
which may be adversely affected by selecting a tariff option that is unpopular with other households
in an egalitarian society. Focus group participants suggested that households opting for high-security
tariffs may be perceived as selfish or lacking concern for the community and, as a result, face a
backlash from the community. Utility may also be affected by externalities such as visual amenity
from other households avoiding restrictions and benefits derived from preventing other households
from using water in ways that are perceived to be wasteful.
A number of elements of the questionnaire were included for the purpose of developing a better
understanding of these externalities. First, we used a split sample treatment of policy context, with
some respondents told they were voting on scenarios to apply across the whole community and
others told they were choosing tariff options for their household only, with other households
potentially facing different price-restriction tariff options. Second, we included several questions
relating to the perceived popularity of alternatives, the strength of social utility, and the extent to
which households care about amenity from green gardens and disutility from other households
using water without restriction.
2.4.3 Controls
The survey was carefully prepared to enable accurate estimation of WTP. The costs of restrictions on
households and restrictions on government water use were dealt with separately and this was made
explicit to respondents. A cheap talk script was included to mitigate hypothetical bias. Questions
were included to assess:
attendance to each attribute;
whether respondents were treating the risk of restrictions as equal over time (as asked) or
whether they anticipated the risk of restrictions increasing over time;
whether respondents were expecting to move away from Canberra within five years;
whether respondents found the choice scenarios plausible and, if they did not, whether they
suspended their disbelief or answered as though the levels were different;
the reasoning of respondents who chose the status quo alternative in every choice question;
whether respondents may have acted strategically to keep tariff options under consideration
knowing the choice is not binding;
whether respondents paid attention to the policy context described in the survey;
whether respondents thought the survey results would influence ACTEW policy;
respondents’ knowledge and experience of restrictions;
respondents’ knowledge of their water bills; and
socio-demographic and water use characteristics of respondents.
14 McNair, B. J. and Ward, M.B.
The impacts of restrictions on government use were measured by asking households to equate the
impacts with those of restrictions on households. We included a question to gauge the extent to
which altruism influenced respondents’ views on the impact of restrictions on government use.
Responses to this question will help disentangle the disutility from adverse impacts on a
respondent’s own use of public assets and the disutility from seeing adverse impacts on others.
Willingness to pay research project 15
3 Survey fieldwork
3.1 Recruitment The majority of participants were recruited by Taverner Research using computer-assisted telephone
interview (CATI) between 19 September and 5 October 2011. Telephone numbers were selected by
random number dialling, subject to known Canberra telephone number prefixes. The script used for
these recruitment calls is set out in Appendix A. Some 1409 households were eligible for at least one
of the three questionnaires conducted as part of this research project (water, electricity, and gas),
indicated that they would be willing to participate in the research, and provided an email address for
the purpose of receiving links to the online questionnaires. The interviews were used to screen out
any households that did not face both the costs (via utilities bills) and benefits (via living in the
residence) of changes in the balance between cost and standards of utility services. Households
were only deemed eligible for the water survey if they:
1. receive water and sewerage bills for the residence in which they live; or
2. pay a regular, specific charge for water to a landlord or body corporate and the landlord of
body corporate always provides a copy of their ActewAGL bill to demonstrate the amounts
that are being passed through.
Property owners that reside elsewhere and renters whose payments for water are not a direct pass-
through of ActewAGL charges were excluded.
The interviews were also used to collect information on location (suburb and postcode), dwelling
type (separate house; semi-detached, row/terrace house, or townhouse; or flat, unit or apartment),
and tenure type (fully owned, being purchased, rented). As far as possible, the sample was selected
to be representative of the population with respect to these characteristics. Details of the
characteristics of the sample of participants who followed through and completed at least one
questionnaire are discussed in the following section of this report.
A cash prize draw was offered as an incentive to participate to increase the response rate and to
mitigate sample selection bias. The prizes were $2000 for first place and $500 for each of four
runners-up. Participants qualified for the prize draw once they had completed one of the online
questionnaires. Participants completing a second online questionnaire were entered twice more into
the draw. The winners were drawn on 19 October 2011 by Taverner Research.
An additional 223 participants had been recruited as part of a survey on water conservation
measures undertaken by ACTEW earlier in 2011. In that survey, respondents were asked if they
would be willing to provide their email address for the purpose of receiving an invitation to
participate in a related survey later in the year. Of the respondents answering in the affirmative, 110
had been recruited to that survey by a market research firm, while the remaining 113 had accessed
the survey via a link on ACTEW’s website.
All 1632 of the participants discussed above (1409 recruited by Taverner Research plus 223 recruited
in the earlier ACTEW survey) were sent an email inviting them to complete up to two questionnaires
as part of the study (see Appendix B). The email briefly reiterated the reason for the research and
16 McNair, B. J. and Ward, M.B.
described how the results were likely to be used, with published results in a grouped, anonymous
format, before providing links to two of the three questionnaires. The questionnaires were selected
based on eligibility and the target number of responses to each of the three surveys. Participants
recruited through the earlier ACTEW survey were invited to complete the water and electricity
questionnaires, since there households’ eligibility for the gas survey was unknown. The email
invitation was sent within 24 hours of the telephone interview, with reminder emails sent towards
the end of the survey period to those who had not yet completed a questionnaire. The online
questionnaires, which were implemented by SurveyHelp, were open from 19 September to 14
October 2011. During that time, 1349 questionnaires were completed by 776 respondents across the
water, electricity, and gas surveys.
Table 3: Recruitment and completion statistics
Recruitment Taverner CATI 1409
ACTEW PWCM survey
Recruited sample 110
Open access 113
Total
1632
Online participation Did not complete a questionnaire 856
Completed one questionnaire 203
Completed two questionnaires 573
Total
1632
Questionnaires completed Water 667
Electricity 408
Gas
274
Total
1349
3.2 Sample characteristics Table 4 shows that participants for the water survey were selected from across all postcodes in the
ACT in proportions representative of the number of dwellings in each postcode area (as counted by
the Australian Bureau of Statistics 2006 census).
Willingness to pay research project 17
Table 4: Survey completions by postcode (per cent)
Postal area Dwellings (2006) Survey completions McNair and Ward 2012
2600 2.5 2.6
2601 0.4 0.5
2602 9.3 12
2603 2.7 2.7
2604 3.4 2.9
2605 3.6 3.6
2606 2.9 3.8
2607 4.3 3.9
2611 7.1 7.7
2612 4.7 5.1
2614 6.1 4.6
2615 11.9 11.5
2617 7.4 8.9
2900 0.5 0.3
2902 4.6 4.8
2903 2.8 2.6
2904 3.6 3.1
2905 7.9 7.2
2906 4.8 3.4
2912 1.9 1.9
2913 6.2 6.2
2914 0.8 0.7
Recruiting a sample representative of dwelling and tenure type proved difficult. Renters (see Table
5) and higher-density dwellings (see Table 6) were under-sampled relative to the population. Advice
from market research practitioners suggests that recruiting renters to research via telephone is
becoming increasingly difficult because the move away from fixed, landline telephones is particularly
prevalent amongst this group. Our recruiters found it particularly difficult to find renters receiving
transparent pass-through of ActewAGL water bill amounts from their landlords. Some of the focus
group participants suggested that it is commonplace for property management agents to pass
through water consumption charges only if they exceed a certain threshold. Although the tenure
type characteristics of the sample are not representative of the full population of dwellings in the
ACT, they may be representative of the population of households paying the relevant utility bills for
the residence in which they live. However, care should be taken when aggregating WTP estimates
over the ACT population.
Table 5: Water survey completions by tenure type (per cent)
Tenure type Dwellings (2006) Survey completions
McNair and Ward 2012
Fully owned 30.4 50.4
Being purchased 39.1 45.8
Rented 30.5 3.8
18 McNair, B. J. and Ward, M.B.
Table 6: Water survey completions by dwelling type (per cent)
Tenure type Dwellings (2006) Survey completions
Flat, unit or apartment 12.0 4.5
Semi-detached, row/terrace house, townhouse 13.8 7.8
Separate house 74.1 87.8
The characteristics of survey respondents in terms of age, education, and income are presented in
Table 7. The population being drawn from is the set of household members responsible for paying
utility bills (who are then asked to respond on behalf of their household). The characteristics of this
population are unknown because the Australian Bureau of Statistics cannot provide data relating to
Person #1 on the census forms.
Table 7: Survey completions by age, education, and income (per cent)6
Survey completions
Age
Under 25 1
25-39 14
40-54 34
55-64 32
65+ 19
Highest level of education
Less than year 10 1
Year 10 4
Year 12 10
Diploma or certificate 22
Undergraduate degree 32
Postgraduate degree 31
6 Personal income ranges were set to be consistent with the equivalent question in the NERA and ACNielsen
study in 2003, adjusted for inflation. Households income ranges were set to be consistent with ABS census
questions.
Willingness to pay research project 19
Survey completions
Personal income ($A 2011)
Less than $25,000 10
$25,000 - $44,999 18
$45,000 - $64,999 18
$65,000 - $129,999 43
$130,000 - $189,999 8
$190,000 - $249,999 2
$250,000 - $320,000 1
Over $320,000 0
Household income ($A 2011)
$1-$12,999 0
$13,000-$25,999 2
$26,000-$41,999 6
$42,000-$61,999 7
$62,000-$87,999 16
$88,000-$129,999 21
$130,000-$181,999 22
$182,000 or more 18
20 McNair, B. J. and Ward, M.B.
4 Results This section sets out the main results from the survey, focussing on estimation of households’ WTP
for changes in supply security. While these estimates are of interest on their own, the primary
benefits to be gained from the study are in the comparison of these estimates with the marginal
costs (or cost savings) from changing supply security. ACTEW may find it useful to use these results
in cost-benefit analysis as they have with past WTP studies to assess whether the balance between
cost and supply security could be altered to better suit customers’ preferences.
4.1 Estimates of willingness to pay
4.1.1 Overview
Choice modelling is a developing field that has seen several important advances in econometric
methods for choice data analysis over the past decade. Results can vary significantly over candidate
choice models and debate continues over the merits of various econometric specifications. In this
study, the research team estimated a considerable number of models to identify the findings that
are robust to changes in econometric specification. The models presented in this report are
examples of the models that have been estimated that are consistent with the following findings,
which arose consistently across different models.
On average, households are very averse to Stage 4 restrictions and are willing to pay significant amounts to reduce the likelihood that they will occur.
On average, households prefer water conservation measures to a situation with no restrictions.
There is considerable variation across households in WTP to avoid water restrictions.
On average, the preference for low-level water restrictions is greater when they are applied to the whole community as opposed to the respondent’s own household (via tariff options).
On average, the WTP to avoid high-level restrictions is greater when they are applied to the whole community as opposed to the respondent’s own household (via tariff options).
4.1.2 Selecting the sample for estimation
Overall, 243 (or 39 per cent of) respondents from the recruited sample7 were omitted from the WTP
models to ensure that responses used to estimate the models were given on the basis of the
attribute levels presented and with an understanding of the policy context. This exclusion rate is
relatively high due to the controls carefully and intentionally included in the questionnaire, the
somewhat controversial topic of the survey, and the cognitively demanding nature of the
questionnaire. Specific reasons for the exclusions are as follows.
Some 49 water survey respondents were recruited via an earlier ACTEW survey and accessed that
survey via the open link on www.actew.com.au as opposed to being recruited by a market research
company. These respondents were omitted from the choice analysis due to concerns over selection
bias in the way they were recruited. It was judged that open access participants were more likely to
have strong views on restrictions and would not be representative of the wider population.
7 Excludes respondents that were recruited via the earlier ACTEW survey and accessed that survey via the open
link at www.actew.com.au (as opposed to those recruited by ORIMA Research).
Willingness to pay research project 21
A number of data observations were omitted from models used to estimate WTP to ensure that the
data consisted only of responses to the questions being asked. The status quo options, despite not
being based on ACTEW’s most recent forecasts, were considered reasonably realistic by 90 per cent
of respondents. Two thirds of those that did not find the status quo scenario realistic indicated that
they suspended their disbelief when answering the choice questions. The remaining 22 respondents,
who indicated that they answered as though the attribute levels were different, were omitted from
the WTP models. Similarly, the majority of respondents found the alternative packages realistic.
Some 34 respondents who found at least one package unrealistic and answered the question as
though the levels were different were omitted from the WTP models.
Around 18 per cent of respondents chose the status quo option in all six choice questions. This
choice pattern can indicate serial non-participation; that is, a decision process that is not related to
the attribute levels presented in the alternatives. Around 14 per cent of respondents gave reasons
for this choice pattern that were judged to be consistent with serial non-participation and were
omitted from the WTP models. Of these reasons, the most frequently given was “I disagree with the
notion of people paying to avoid water restrictions” (46 per cent), followed by “I disagree with the
notion of offering people money to face more water restrictions” (26 per cent), and “I expect ACTEW
would implement service reductions without delivering the associated bill decreases” (22 per cent).
The other reasons that were considered indications of non-participation were “I didn’t have enough
time to properly evaluate the options”, “I didn’t have enough information to be confident choosing
the options”, and “I expect ACTEW would implement the bill increases shown without delivering the
associated service improvements”.
Around 9 per cent of respondents indicated that they thought the results of the survey would not
influence ACTEW policy and another 22 per cent indicated a perceived policy context for the study
that differed from what was described in the instructions on the questionnaire (see Table 8). The
latter group were omitted from our models so as not to taint the assessment of the impact of policy
context on responses.
Table 8: Attendance to policy context
“What is your understanding of the way in which the results of this
survey will be used to inform ACTEW policy?”
Policy framing
Community-wide
Tariff options
To inform a decision on a package to apply to the whole community 230 (69%) 69 (21%)
To inform a decision on a set of packages from which households would be able to choose a package to suit their needs and budget
81 (24%) 229 (69%)
The results of this survey will not influence ACTEW policy 24 (7%) 34 (10%)
Finally, 15 respondents completing the questionnaire in less than ten minutes were also excluded
because it was judged that their responses may have been, at best, poorly considered and, at worst,
given randomly purely as a means of qualifying for the prize draw.
The comparison of characteristics of those included and excluded in Table 9 shows that the two
groups are statistically equivalent at the 0.05 level in terms of age, type of dwelling, estimated bill
amounts, household size, and the proportion of undergraduate degrees. Equivalised household
22 McNair, B. J. and Ward, M.B.
income and the proportion of postgraduate degrees are higher in the included group. Some
differences in attitudes also appear to exist between the groups. Respondents in the included group
are less likely to think poorly of those paying to avoid restrictions and less likely to expect others to
think poorly of them for doing so. They are more likely to get enjoyment from green gardens when
restrictions are in place and they are more likely to think that Stage 3 restrictions or above will be
required at some point over the next 20 years.
Table 9: Characteristics of included and excluded samples
Included Excluded t or χ
2
p-value
Equivalised household income (mean $’000s per annum) 60.32 55.63 0.05
Age (mean years) 53.77 53.60 0.87
Semi-detached or flats (proportion) 0.11 0.12 0.59
Undergraduate degree (proportion) 0.33 0.29 0.35
Postgraduate degree (proportion) 0.35 0.26 0.02
Bill estimate (mean dollars per annum) 937.09 913.69 0.62
Household size (mean persons) 2.86 2.83 0.82 Likert Scale questions (mean rating out of 5, where 5=strongly agree)
Households should be able to buy exemptions from water restrictions, with the raised funds given as rebates to households that do face restrictions.
2.45 2.35 0.30
Others in my neighbourhood would think poorly of me if I wasn’t facing restrictions and they were.
3.86 3.70 0.05
It would mostly be people with a lack of concern for the community that would pay to avoid water restrictions.
3.33 3.51 0.05
When water restrictions are not in place, I get enjoyment from seeing green gardens and lawns in my neighbourhood.
4.32 4.20 0.07
When water restrictions are in place, I get enjoyment from seeing green gardens and lawns in my neighbourhood.
3.22 3.03 0.04
Water conservation measures should apply permanently to stop households from wasting water, even when the dams are full.
3.67 3.68 0.87
I avoid some desired uses of water because I am worried about what my neighbours will think.
2.46 2.58 0.15
I feel a sense of community spirit with my fellow Canberrans when we all pull together to conserve water.
3.95 3.85 0.18
Stage 3 restrictions (or above) will not be required at any time over the next 20 years.
2.33 2.57 0.00
Before answering this questionnaire, I was familiar with the restrictions on water use associated with each ‘stage’ of water restrictions in the ACT.
3.91 3.83 0.20
Willingness to pay research project 23
4.1.3 Choice models
Panel mixed multinomial logit models of household choice estimated in WTP-space using Biogeme
(Bierlaire 2003) are shown in Table 10.8 Separate models are estimated on data from the
community-wide and tariff option policy contexts. Externalities and social interactions that would
cause differences in preferences under the two policy contexts include the following:
the loss of amenity from other households facing restrictions (present in the community-
wide context, but not the tariff options context);
the benefit gained from preventing other households from using water in ways that are
perceived to be wasteful (present in the community-wide context, but not the tariff options
context);
the loss of social status from choosing options (most likely high-security options) that are
considered by others to indicate a lack of concern for the community (present in the tariff
options context, but not in the community-wide context); and
the benefit of community spirit or camaraderie when all households are ‘pulling together’
to conserve water (present in the community-wide context, but not the tariff options
context).
For the purpose of this report, we provide choice models and estimates of WTP under the two policy
contexts, but we do not attempt to disentangle the effects listed above. Developing an
understanding of the difference in responses across the two policy contexts will be an objective of
further research by the research team.
The relative order of the coefficients on restriction attributes accords with a priori expectations and
the large t-statistics suggest that respondents gave considered responses to the choice questions on
the basis of the service attributes presented. Respondents exhibited a status quo bias in the sense
that the alternative (non-status-quo) packages were chosen only when the value placed by
respondents on the package attributes was at least $100 per annum higher than the value placed on
the status quo attributes, on average. Status quo bias is a phenomenon common not only in stated
preference surveys, but also in real markets. In this case it could be caused by one or more of several
factors, including non-constant marginal utility and perceived uncertainty over outcomes from
implementing new scenarios. We focus on reporting the average WTP, but it is important to
recognise there is considerable heterogeneity in household preferences as evidenced by the
diagonal elements of the Cholesky matrix, which represent the standard deviations of normal
distributions around the mean WTP estimates after accounting for correlation between the random
parameter distributions.
8 Models allowing for asymmetric valuation of gains and losses were tested, but no consistent asymmetry was
found.
24 McNair, B. J. and Ward, M.B.
Table 10: Models of household choice between water supply security scenarios
Community-wide
policy context Tariff options policy context
Coef. Robust
t-test Coef. Robust
t-test
Random parameters: means (Average WTP) Alternative-specific constant: status quo 129.0 64.44 108.0 51.77
Water conservation measures (number of years in 20) 18.6 11.46 10.5 28.35
Stage 1 restrictions (number of years in 20) 15.6 8.72 0.9 2.55
Stage 2 restrictions (number of years in 20) -0.8 -0.42 -6.9 -9.52
Stage 3 restrictions (number of years in 20) -54.3 -45.49 -21.6 -48.14
Stage 4 restrictions (number of years in 20) -185.0 -15.07 -116.0 -112.45
Random parameters: diagonal elements of Cholesky matrix (Standard deviation in WTP)
Alternative-specific constant: status quo 239.0 54.51 83.6 15.75 Water conservation measures (number of years in 20) 6.1 16.87 16.4 42.98
Stage 1 restrictions (number of years in 20) 19.5 9.13 45.9 140.52
Stage 2 restrictions (number of years in 20) 18.7 23.65 25.7 37.29
Stage 3 restrictions (number of years in 20) 13.6 13.47 19.4 33.28
Stage 4 restrictions (number of years in 20) 44.2 11.16 44.0 16.56
Random parameters: below-diagonal elements of Cholesky matrix (Correlations)
ASC: WCM -0.9 -2.80 -24.2 -55.88
ASC: Stage 1 18.7 16.22 -35.4 -29.46
ASC: Stage 2 18.2 17.87 -74.8 -116.94
ASC: Stage 3 105.0 56.37 -100.0 -55.91
ASC: Stage 4 286.0 13.00 -224.0 -96.51
WCM: Stage 1 -43.7 -25.15 -18.6 -49.41
WCM: Stage 2 -16.1 -21.54 3.5 23.20
WCM: Stage 3 -12.2 -33.16 -3.6 -10.60
WCM: Stage 4 2.3 7.66 1.7 9.50
Stage 1: Stage 2 -19.3 -27.43 18.1 79.04
Stage 1: Stage 3 -12.5 -8.29 0.9 1.62
Stage 1: Stage 4 -47.5 -14.89 -74.7 -56.14
Stage 2: Stage 3 -67.5 -69.99 -6.3 -13.17
Stage 2: Stage 4 -71.2 -29.85 -83.0 -49.61
Stage 3: Stage 4 -92.4 -20.03 -74.9 -70.87
Scale (Extent to which responses are deterministic) Mean -4.7 -22.45 -3.4 -12.09
Scale x sequence position 3, 4, or 5 1.2 2.58
Scale x Sequence position 2
-0.1 -0.34
Scale x Sequence position 3
-0.2 -0.17
Scale x Sequence position 4
-0.6 -1.35
Scale x Sequence position 5
0.3 0.75
Scale x Sequence position 6
0.1 0.20
Standard deviation 2.3 4.28 2.3 10.02
Willingness to pay research project 25
Community-wide
policy context Tariff options policy context
Coef. Robust
t-test Coef. Robust
t-test
Model fit Choice observations 1134
1116
Individuals 189
186 Final log likelihood -984
-984
Note: Estimated in WTP-space where cost variable is change in ongoing annual water and sewerage bill
4.1.4 Willingness to pay
Estimates of WTP to avoid an increase of one year in 20 (a five percentage point increase in
likelihood) derived from these models are shown in Table 11 and Figure 5. Consistent with the focus
group findings, the aversion to Stage 4 restrictions is marked, with the models suggesting
households would be willing to pay $185 per annum on average to reduce the risk of community-
wide Stage 4 restrictions by five percentage points. This aversion was less pronounced under the
tariff options policy context (than under the community-wide policy context), with households
willing to pay $116 to reduce the risk of Stage 4 restrictions by five percentage points. This
difference (between $180 and $116) is consistent with the existence of social stigma from choosing
unpopular high-security tariff options as well as improved visual amenity from other households not
facing Stage 4 restrictions.
In the community-wide policy context, both water conservation measures and Stage 1 restrictions
are preferred to a situation with no restrictions. Households are actually willing to pay $19 and $16
per annum to increase time spent in water conservation measures and Stage 1 restrictions,
respectively, by five percentage points (with a corresponding decrease in time spent without
restrictions). In the tariff options policy context, the WTP for water conservation measures is
approximately halved, while the preference for Stage 1 restrictions disappears altogether. This result
would suggest that households obtain some benefit from preventing other households from using
water in ways that they perceive to be wasteful.
Table 11: Average willingness to pay to avoid a five percentage point increase in likelihood of restrictions
(dollars per annum)
Community-wide
policy context
Tariff options
policy context
WCM -19 -11
Stage 1 -16 -1
Stage 2 1 7
Stage 3 54 22
Stage 4 185 116
When interpreting these results, there are a couple of points that are important to bear in mind.
First, these values represent only the cost of restrictions on households, since respondents were
26 McNair, B. J. and Ward, M.B.
instructed to set aside the impact of restrictions on government water use as this would be
addressed by separate questions. Second, some 36 per cent of respondents indicated that they
thought of restrictions as being less likely at the start of the 20 year period (compared to the later
part of the period). As a result, it is likely that these respondents discounted the impact of
restrictions to some extent, while cost is even over time. This discounting will mean that estimated
WTP does not relate to the likelihood of restrictions presented in the question, but some other,
slightly lower, likelihood. In other words, discounting by these 36 per cent of respondents will result
in a conservative estimate of WTP to avoid restrictions, all else held constant.
Figure 5: Average willingness to pay to avoid a five percentage point increase in likelihood of restrictions
(dollars per annum)
The results discussed above use a situation with no restrictions as the baseline against which the
cost of restrictions is measured. However, the results themselves suggest that the community should
never be in such a situation, since water conservation measures are preferred to a complete absence
of restrictions even before taking their water security benefits into account. Our results suggest the
appropriate baseline for measuring the benefits of investing in supply security is water conservation
measures, since this is the optimal level of water use regulation when water supply security is at its
highest. This approach is also consistent with the current ACT Government policy of permanent
water conservation measures (PWCM). The costs of each level of temporary restrictions (Stage 1 to
Stage 4) measured against this baseline are presented in Table 12 and Figure 6. Of the estimates
presented in this report, these are likely to be most useful to ACTEW for the purposes of cost-benefit
analysis, noting the points on interpretation discussed above.
-50
0
50
100
150
200
WCM Stage 1 Stage 2 Stage 3 Stage 4
Community-wide Tariff options
Willingness to pay research project 27
Table 12: Average willingness to pay to avoid a five percentage point increase in likelihood of restrictions
relative to water conservation measures (dollars per annum)
Community-wide
policy context
Tariff options
policy context
Stage 1 3 10
Stage 2 19 17
Stage 3 73 32
Stage 4 204 127
Figure 6: Average willingness to pay to avoid a five percentage point increase in likelihood of restrictions
relative to water conservation measures (dollars per annum)
Figure 7 demonstrates how these WTP estimates can be used to calculate consumer surplus from
policy scenarios and help ACTEW to understand households’ preferred balance between cost and
supply security.9 The status quo and alternative service scenarios presented in the figure are
9 We have excluded status quo bias from these estimates. The decision processes underlying the status quo
bias in the data are unknown. Some potential components of status quo bias, such as those driven by
uncertainty over the outcomes of implementation, the complexity of the choice task, and conservative
response on behalf of the community, ought to be excluded from welfare estimates. Some other component
may represent a bona fide behavioural phenomenon also observed in real markets and should be included in
welfare estimates. It is not possible to disentangle these components in this data set. The effect of making the
alternative assumption to include the status quo bias in welfare estimates would be a $129 decrease in the
consumer surplus from each ‘change’ scenario. We note this would not change the sign or the ordering of the
consumer surplus estimates across the scenarios in the example.
0
50
100
150
200
250
Stage 1 Stage 2 Stage 3 Stage 4
Community-wide Tariff options
28 McNair, B. J. and Ward, M.B.
approximately representative of the estimated cost of improving supply security during the recent
drought.10 All of the scenarios considered in the figure result in positive consumer surplus, indicating
that households would be made better off by investment in improved supply security. The optimal
level of supply security from the perspective of households is the level at which their consumer
surplus is maximised. In this indicative example, consumer surplus is highest when time spent in
restrictions is reduced by 85 per cent, with annual household bills increasing by $85 on average.
However, this example excludes information required for a full social cost-benefit analysis, such as
the preferences of non-residential consumers and the effects of restrictions on government water
use. ACTEW may find it useful to incorporate the household WTP estimates in their existing cost-
benefit analysis framework using scenarios that accord with up-to-date estimates of the likelihood of
restrictions and the costs of investments in supply security. What we can conclude from this
example is that Canberra households want an increase in supply security (over the levels forecast
during the drought) and they are willing to pay for it.
Figure 7: Average consumer surplus from community-wide policy scenarios (excluding status quo bias)
(dollars per annum)
Note: Assumes “do nothing” time spent in restrictions is 14% in Stage 1, 17% in Stage 2, 6% in Stage 3, 7%
in Stage 4 and remainder in Water Conservation Measures.
The WTP estimates in this study could also be used to revise the operating rules that govern when
the various stages of restrictions will be introduced and removed. For example, if Stage 4 restrictions
10 Approximate reductions in the risk of restrictions were drawn from the July 2007 document - Future Water
Options Review: Water Security Program. Approximate costs were drawn from the 2008 document – Water
Security for the ACT and Region: Progress Report and Recommendations to ACT Government.
0
50
100
150
200
250
300
350
Reduce risk of restrictions by
60%, with $35 premium on annual bill
Reduce risk of restrictions by 85%, with $85 premium on annual bill
Reduce risk of restrictions by
92%, with $130 premium on annual bill
Reduce risk of restrictions by 95%, with $165 premium on annual bill
Willingness to pay research project 29
are more costly than previously thought, there may be merit in delaying the introduction of Stage 4
restrictions by bringing forward the introduction of lower stages of restrictions.
4.1.5 Comparison with NERA and ACNielsen 2003
NERA and ACNielsen found in 2003 that households were unwilling to pay to avoid low level
restrictions. We also found a lack of WTP to avoid low-level restrictions, and, in fact, found evidence
of WTP for water conservation measures and Stage 1 restrictions. In relation to higher-level
restrictions, NERA and ACNielsen found that residential customers were willing to pay $237 on
average to avoid a year in restrictions at Stage 2 (called Stage 3 at the time) or higher ($302 after
adjusting for inflation). In order to compare the 2003 result with the present study, we need to
convert the 2003 WTP estimate from a measure of WTP to avoid a year in restrictions for certain to a
measure of WTP to avoid an increase in the likelihood of time spent in restrictions. In order to do so,
we need to make an assumption about risk aversion. The most basic analysis would assume no risk
aversion; that is, where utility is linear in probability, U = β1.SQ + β2.prob(wcm) + … + β6.prob(stage4)
+ λ.ΔBill. In this case, the $302 per annum WTP figure would be multiplied by 0.05 to give a WTP
estimate of $15 per annum for a five percentage point reduction in the likelihood of higher-level
restrictions. It is lower than our equivalent estimates of $19, $73, and $204 for Stage 2, Stage 3, and
Stage 4 restrictions. Introducing an assumption of risk aversion would increase the 2003 estimate
above $15. For example, in a case where U = β1.SQ + β2.prob(wcm)1/2 + … + β6.prob(stage4) 1/2 +
λ.ΔBill, the estimate for a decrease in likelihood from 15 per cent to 10 per cent would be $28.11
While plausible risk aversion levels increase the converted 2003 estimate above the $19 we have
estimated for Stage 2 restrictions, it seems certain the converted estimate would remain well below
our estimates of the costs of Stage 3 and Stage 4 restrictions, even at quite extreme levels of risk
aversion.
In summary, since 2003, households have developed a preference for low-level restrictions over a
situation with no restrictions. However, they are now more opposed to higher-level restrictions and
are willing to pay more to avoid them.
It would appear that the effect of experiencing drought water restrictions over the intervening
period has been an increase in households’ aversion to severe restrictions despite considerable
investment by households in measures to reduce the impact of restrictions, such as re-landscaping
and installing water tanks and grey-water reuse systems (see Figure 12 on page 34).
4.2 Preferences for government water use Respondents were presented with six types of restrictions on government use and asked at which
stage of household restrictions the government restrictions should be introduced. Figure 8 shows
that the median preferences are as follows.
Half of ovals, sports grounds, parks and public spaces should be allowed to brown off with
Stage 2 restrictions.
The remaining half should be allowed to brown off with Stage 3 restrictions.
11 We ran four risk aversion models with probabilities raised to the power 0.2, 0.4, 0.6, and 0.8. None of the
four models resulted in an improvement on the model fit of the risk-neutral model.
30 McNair, B. J. and Ward, M.B.
Stage 3 restrictions should also coincide with 5 per cent of street trees being allowed to die
each year due to drought.
Further restrictions on watering of street trees so that 10 per cent die each year due to
drought would be acceptable when households are facing Stage 4 restrictions.
Figure 8: Preferences for restrictions on government water use (n=667)
4.3 Attitudes towards water restrictions and pricing The social interactions associated with water restrictions are emphasised by the following findings
(see Figure 9).
Only around one quarter of households agreed that households should be able to purchase
exemptions from restrictions, with raised funds given as rebates to households that do face
restrictions.
Most households agreed that others would think poorly of them if they were facing
restrictions and their neighbours weren’t.
The majority of households believe that “it would mostly be people with a lack of concern
for the community that would pay to avoid water restrictions.”
While almost all households enjoy seeing green gardens in their neighbourhoods when
restrictions are not in place, less than half get this enjoyment when restrictions are in place.
Most households think water conservation measures should apply permanently, even when
dams are full.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Half of ovals and sports
grounds are allowed to brown off
All ovals and sports grounds are allowed to
brown off
Half of parks and public spaces are allowed to brown off
All parks and public spaces are allowed to
brown off
5% of street trees are
allowed to die each year due
to drought
10% of street trees are
allowed to die each year due
to drought
After Stage 4
With Stage 4
With Stage 3
With Stage 2
With Stage 1
With water conservation measures
Before water conservation measures
Willingness to pay research project 31
A quarter of households indicated that they avoided some water uses because they are
worried about what their neighbour would think.
A majority of households felt a sense of community spirit as a result of community-wide
water restrictions.
In relation to past and future water restrictions:
The vast majority of households indicated a familiarity with the water restrictions scheme in
the ACT.
Most households thought that Stage 3 restrictions or higher would be required at some
point over the next 20 years.
With respect to pricing:
Households are evenly split on the issue of whether prices should vary inversely with supply
availability.12
On average, households are slightly in favour of an inclining block tariff.
12 This result is in contrast to the focus group finding that most participants were in favour of price varying
inversely with supply availability.
32 McNair, B. J. and Ward, M.B.
Figure 9: Attitudes towards water restrictions and pricing (n=667)
Households generally have little or no knowledge of the details on their water and sewerage bills.
Around 40 per cent of households indicated that they did not recall any amounts from their most
recent bill. Another 50 per cent felt they could recall the total bill amount. Only around one in ten
households indicated more detailed recollections of their most recent bill.
0% 20% 40% 60% 80% 100%
Households should be able to buy exemptions from water
restrictions, with the raised funds given as rebates to households that do face restrictions.
Others in my neighbourhood would think poorly of me if I
wasn’t facing restrictions and they were.
It would mostly be people with a lack of concern for the
community that would pay to avoid water restrictions.
When water restrictions are not in place, I get enjoyment
from seeing green gardens and lawns in my neighbourhood.
When water restrictions are in place, I get enjoyment from
seeing green gardens and lawns in my neighbourhood.
Water conservation measures should apply permanently to stop households from wasting water, even when the dams
are full.
I avoid some desired uses of water because I am worried about what my neighbours will think.
I feel a sense of community spirit with my fellow Canberrans when we all pull together to conserve water.
Stage 3 restrictions (or above) will not be required at any time over the next 20 years.
Before answering this questionnaire, I was familiar with the
restrictions on water use associated with each ‘stage’ of water restrictions in the ACT.
The ‘per kilolitre’ price of water should be lower when the dams are full and higher during water shortages.
The ‘per kilolitre’ price of water should jump up once a
certain level of water use has been reached by a household each quarter.
Strongly disagree Disagree Don't know / unsure Agree Strongly agree
Willingness to pay research project 33
Figure 10: Knowledge of bill details (n=667)
Households were asked to give a range within which they are reasonably sure their annual water
and sewerage bill amount would lie. Half of all households were confident enough in their estimate
to give a range less than $200.
Figure 11: Range in lower and upper bounds on respondent estimates of annual water and sewerage bill
(cumulative proportion of respondents, n=667)
The most common actions taken during the drought were the purchase of equipment for more
efficient outdoor water use, re-landscaping of gardens, and installing a water efficient appliance
0% 20% 40% 60% 80% 100%
Prior to completing this questionnaire, to what level of detail would you have been able to recall amounts on your most recent water and sewerage bill (without looking back at your actual bill)?
I don’t recall any amounts
The total bill amount
The water and sewerage components of the bill
The sewerage supply charge, water supply charge, and total water consumption charges
The sewerage supply charge, water supply charge, my consumption in kilolitres, and the price of water in dollars per kilolitre
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0 100 200 300 400 500 600 700 800
34 McNair, B. J. and Ward, M.B.
indoors. Only one in ten households indicated they had not taken any of the actions listed in the
question.
Figure 12: Actions already taken in response to drought and restrictions (n=667)
Similarly, almost all households have been impacted by restrictions in some way. More than half of
households saw their lawn and some plants die, spent more time watering their garden by hand, and
allowed their car to be dirty more often.
Figure 13: Impact of recent restrictions (n=667)
0%
10%
20%
30%
40%
50%
60%
70%
Purchased equipment for more efficient outside water
use
Installed low-flow inside plumbing
equipment
Re-landscaped your garden to use less water
Removed an irrigation
system
Bought or installed a
water efficient appliance inside the
house
Installed permanent system for
capturing grey water
Installed a rain water tank
Removed a swimming
pool
None of these
Please indicate whether you have taken each of the following actions at any time over the past
eight years.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
My lawn died Some plants in my garden died
Many plants in my garden died
I spent more time watering my garden by
hand
My car was dirty more often
I spent less leisure time
outdoors
I stopped using my swimming
pool
None of these
Please indicate how the recent period of water restrictions affected your household.
Willingness to pay research project 35
Appendix A: Telephone interview screener
RECRUITMENT SCREENER
Project No.: 4076 Project Name: ANU Utilities Survey
Recruit Start Time: Recruit Finish Time:
NOTE TO RECRUITER:
TEXT IN CAPITALS ARE INSTRUCTIONS
Text in sentence case is the script, which should be read exactly as written.
SECTION A: MANDATORY REQUIREMENTS
INTRODUCTION
Good morning/afternoon/evening. My name is [RECRUITER] and I’m calling from Taverner Research on behalf of the Australian National University.
We are conducting a research project funded by ACTEW and ActewAGL looking
at household views on potential changes to water, electricity, and gas services in the ACT. In particular, we need to talk to the person who pays the bills in your
household. Are you that person, or is there someone else we should talk to?
IF SAY THEY ARE NOT ACT RESIDENT OR ACTEW/ACTEWAGL CUSTOMER – THANK AND TERMINATE.
IF EQUAL RESPONSIBILITY, TARGET QUALIFIES
WHEN CORRECT PERSON ON LINE, RE-INTRODUCE IF NECESSARY The research will involve a short 3 to 5 minute telephone survey now to see if
you qualify and then filling out one to two questionnaires on the internet. Each questionnaire takes about 15 to 20 minutes to complete.
36 McNair, B. J. and Ward, M.B.
Participation is purely voluntary. However, a prize draw is being offered as a ‘thank you’ for participating. First prize is $2000 and four runners up receive
$500 each.
IF FURTHER QUESTIONS ASKED ABOUT PRIZE DRAW:
A maximum of 1620 households will be invited to participate. You will be entered into the draw once you have completed and submitted one
questionnaire. If you choose to complete a second questionnaire, you will be given two more entries into the draw (to triple your chances of winning).
Full terms and conditions for the draws will be sent to you via email if you agree to participate.
If you choose to participate, the information and opinions you provide will be kept completely confidential and used only for research purposes.
IF CALL WILL BE RECORDED, MONITORED OR OBSERVED: I would also like to make you aware that
before we begin, this call may be [recorded/monitored/observed] for quality assurance and/or
training purposes.
Q1. Are you interested in participating in this research? DO NOT READ
1. Yes
2. No
IF 2 IN Q1, ABORT
SECTION B: INDIVIDUAL PROJECT REQUIREMENTS
Let me ask a few questions to check that you are one of the people we need for the survey.
S1. Could you please tell me if you, or anyone you know well, are employed
by…READ OUT
Willingness to pay research project 37
1. ACTEW or ActewAGL?
2. a company or organisation that offers products or services relating to the use of water,
electricity, or natural gas?
3. a market research company?
95. None of the above
IF 1, 2, OR 3 IN Q2, ABORT
S2. In which suburb do you live? CHECK POSTCODE QUOTAS. DO NOT READ
1. Acton 2. Ainslie 3. Amaroo 4. Aranda 5. Banks 6. Barton 7. Belconnen 8. Bonner 9. Bonython 10. Braddon 11. Bruce 12. Calwell 13. Campbell 14. Chapman 15. Charnwood 16. Chifley 17. Chisholm 18. City 19. Conder 20. Cook 21. Curtin 22. Deakin 23. Dickson 24. Downer 25. Duffy 26. Dunlop 27. Evatt 28. Fadden 29. Farrer 30. Fisher 31. Florey
38 McNair, B. J. and Ward, M.B.
32. Flynn 33. Forrest 34. Franklin 35. Fraser 36. Fyshwick 37. Garran 38. Gilmore 39. Giralang 40. Gordon 41. Gowrie 42. Greenway 43. Griffith 44. Gungahlin 45. Hackett 46. Hall 47. Harrison 48. Hawker 49. Higgins 50. Holder 51. Holt 52. Hughes 53. Hume 54. Isaacs 55. Isabella Plains 56. Kaleen 57. Kambah 58. Kingston 59. Latham 60. Lawson 61. Lyneham 62. Lyons 63. Macarthur 64. Macgregor 65. Macquarie 66. Mawson 67. McKellar 68. Melba 69. Mitchell 70. Monash 71. Narrabundah 72. Ngunnawal 73. Nicholls 74. O'Connor 75. O'Malley 76. Oaks Estate 77. Oxley 78. Page 79. Palmerston 80. Parkes 81. Pearce 82. Phillip
Willingness to pay research project 39
83. Pialligo 84. Red Hill 85. Reid 86. Richardson 87. Rivett 88. Russell 89. Scullin 90. Spence 91. Stirling 92. Symonston 93. Tharwa 94. Theodore 95. Torrens 96. Turner 97. Wanniassa 98. Waramanga 99. Watson 100. Weetangera 101. Weston 102. Yarralumla 103. Other - TERMINATE
S3. Is your residence... READ OUT
1. Owned outright 2. Owned with a mortgage or being purchased under a rent/buy scheme
3. Being rented or occupied rent-free 4. Other
CHECK QUOTAS
‘OWNED OUTRIGHT’ MEANS THAT NO MONEY IS OWED ON THIS DWELLING.
‘OWNED WITH A MORTGAGE’ REFERS TO HOUSEHOLDS CURRENTLY MAKING REPAYMENTS ON ANY
TYPE OF MORTGAGE OR LOAN SECURED AGAINST THE DWELLING.
‘BEING PURCHASED UNDER A RENT/BUY SCHEME’ REFERS TO HOUSEHOLDS WHO ARE BOTH
PURCHASING SOME EQUITY IN THE DWELLING, AND PAYING RENT FOR THE REMAINDER.
‘BEING OCCUPIED RENT–FREE’ REFERS TO SITUATIONS WHERE THE MEMBERS OF THE HOUSEHOLD
DO NOT PAY ANY RENT, OR WHERE RENT IS PAID FOR THE DWELLING BY SOMEONE ELSE OUTSIDE
THE HOUSEHOLD.
OTHER INCLUDES ‘BEING OCCUPIED UNDER A LIFE TENURE SCHEME’, WHICH REFERS TO
HOUSEHOLDS OR INDIVIDUALS WHO HAVE A ‘LIFE TENURE’ CONTRACT TO LIVE IN THE DWELLING
BUT USUALLY DO NOT HAVE ANY EQUITY IN THE DWELLING. THIS IS A COMMON ARRANGEMENT IN
RETIREMENT VILLAGES.
40 McNair, B. J. and Ward, M.B.
S4. Is your residence a... READ OUT
1. Separate house 2. Semi-detached, row or terrace house, or a townhouse
3. Flat, unit, or apartment 4. Other
CHECK QUOTAS
Q2. Do you have access to the internet and a current email address? DO NOT READ
1. Yes
2. No
IF 2 in Q2, ABORT: “Unfortunately you won’t be able to participate in the study. Thank you for your interest in the research though.”
Q3. Do you receive electricity bills from ActewAGL for the residence you live in? DO NOT READ
1. Yes
2. No
IF NO in Q3 Q4. Do you receive electricity bills from some other electricity retail company for the residence you live in? DO NOT READ
1. Yes
2. No
Q5. Do you receive natural gas bills from ActewAGL for the residence you live in? DO NOT READ
1. Yes
Willingness to pay research project 41
2. No
IF NO in Q5 Q6. Do you receive gas bills from some other gas retail company for the residence you live in? DO NOT READ
1. Yes
2. No
Q7. Do you receive water and sewerage bills from ActewAGL for the residence you live in? DO NOT READ
1. Yes
2. No
IF NO in Q7
Q8. Do you pay a regular, specific charge to a landlord or body corporate for water? DO NOT READ
1. Yes
2. No
IF YES in Q8
Q9. When paying this charge, does your landlord or body corporate always provide a copy of their
ActewAGL bill to demonstrate the amounts they are passing through? DO NOT READ
1. Yes
2. No
IF NO in Q4, Q6 AND Q8, OR
IF NO in Q4, Q6 AND Q9, ABORT: “I’m sorry, we are looking for people who pay utilities bills.
Thank you for your interest in the research though.”
42 McNair, B. J. and Ward, M.B.
RESPONDENT IS ELIGIBLE FOR ELECTRICITY IF YES IN Q3 or Q4
RESPONDENT IS ELIGIBLE FOR GAS IF YES IN Q5 or Q6
RESPONDENT IS ELIGIBLE FOR WATER IF YES IN Q7 or Q9
CHECK ELIGIBILITY QUOTAS
Q11. We will be inviting you to fill out questionnaires on the internet. Is there
anything that will hinder your ability to do this? DO NOT READ
1. Yes
2. No
IF 1 IN Q11, ABORT
SECTION C: MANDATORY REQUIREMENTS
IF UNSUCCESSFUL
Thank you for your patience in answering these questions. Unfortunately, we do not need you to participate in our research this time, but we sincerely appreciate
your time and assistance today.
IF SUCCESSFUL
Thank you for completing the telephone part of the survey. The next step is the internet questionnaires. We will need some details from you in order for you to
complete this next step.
Q13. Please may I confirm your name?
(INSERT FULL NAME)
Q14. Please may I confirm your best telephone contact number?
(INSERT NUMBER)
Willingness to pay research project 43
Q15. We will need to email you a link to the internet questionnaires. Could you please provide an email address that you check regularly? Your email
address will be used only for this research project, and we will not provide your email address to ActewAGL, so your survey responses will be anonymous.
(RECORD EMAIL ADDRESS AND VERIFY)
We will not send you the email straight away. It will be sent within the next two days. The email will have the subject heading <ANU ActewAGL Utilities Survey>
and the sender will be [email protected]. If you need to change your email address in the meantime please call us on XX XXXX XXXX. Thank you for
your time.
IF RESPONDENT QUESTIONS AUTHENTICITY:
To verify that Taverner Research is a genuine market research company, you can call the Australian Market and Social Research Society’s Survey Line on 1300
364 830. If you would like to verify this research with ActewAGL, you can phone them on
13 14 93.
44 McNair, B. J. and Ward, M.B.
FINAL CLOSE/TERMINATION (ALL CONTACTS)
Thank you for your cooperation in answering these questions.
INTERVIEWER’S DECLARATION
I certify that this is a true, accurate and complete interview, conducted in accordance with industry
standards and the AMSRS Code of Professional Behaviour (ICC/ESOMAR). I will not disclose to any other
person the content of this questionnaire or any other information relating to this project
Interviewer Name:
Interviewer Signature:
Date:
Willingness to pay research project 45
Appendix B: Email invitation
EMAIL SUBJECT: ANU Utilities Survey
Dear <First Name>,
Re: Household preferences for water, electricity and gas services
Recently you were telephoned and invited to participate in an online survey about water, electricity and gas services in Canberra. Thank you for agreeing to participate in this research process.
What is this project about?
We are interested in understanding how different types of water restrictions and electricity and gas supply interruptions affect your household. Investments made by ACTEW can reduce the amount of time spent in water restrictions in the future. Similarly, investments made by ActewAGL can reduce the number of electricity and gas supply interruptions you experience in the future. However, these investments come at a cost that must be recovered from households over time. We are interested in your views on this “trade off” between standards of service and the cost to your household.
This research is being conducted by researchers at the Australian National University. The project is being funded by ACTEW and ActewAGL through an endowment and through in-kind salary contribution of a research team member. Taverner Research is assisting with the survey process.
Why were you invited to participate in the research?
You have been invited because you are responsible for paying utility bills for a household in Canberra. Participation in this survey is purely voluntary and you are free to withdraw at any stage.
How will the research results by used?
The results of this study will be reported to ACTEW and ActewAGL and used to improve management of water, electricity and gas network infrastructure in Canberra. Results may be published in academic journals. However, published results will only report on survey responses in a grouped format. Individuals’ responses will be de-identified in any publication. We will not reveal your identity to ACTEW or ActewAGL unless you give us permission to do so.
How to complete the questionnaires
We invite you to complete up to two online questionnaires.
Please click on the link below to access the first questionnaire.
<insert URL here>
Please click on the link below to access the second questionnaire.
<insert URL here>
The average time taken to complete each questionnaire is 15-20 minutes.
Once you have completed and submitted the first questionnaire, you will be entered into a prize draw. First prize is $2000 and four runners up receive $500 each.
If you complete both questionnaires, you be given two more entries into the prize draw (to triple your chances of winning).
46 McNair, B. J. and Ward, M.B.
A maximum of 1620 respondents will be invited to participate. Full terms and conditions for the draws are included below.
Who to contact for information or clarification
If you have any technical problems accessing the questionnaire, please contact SurveyHelp by email at [email protected].
If you have any enquiries about the content of the questionnaire, please contact Ben McNair at the ANU by email at [email protected].
If you have any concerns regarding the way in which this survey was conducted, please contact the ANU Human Research Ethics Committee on (02) 6125 3427 or by email at [email protected].
Yours sincerely,
<name>
<email signature>
Competition terms and conditions ACT TP 11/03415: Win up to
$2000 by completing online questionnaires
1. To be eligible to enter and win up to $2000 participants must complete and submit at least one online questionnaire, comprising up to 50 questions per questionnaire. Links to two questionnaires will be sent by email by Taverner Research to persons who have agreed to participate in a research survey conducted on behalf of the promoter.
2. Participants that have completed and submitted one online questionnaire will be automatically entered once into the prize draw. Participants that go on to complete a second online questionnaire will be automatically entered twice more into the prize draw. The online questionnaires must be fully completed and submitted between 9:00am 29 August 2011 and 5:00pm 7 October 2011. Incomplete questionnaires cannot be submitted and will not be entered into the draw.
3. The prizes are
1st prize: $2000
Runners up (x4): $500
Total prizes: $4,000 including GST.
4. Each prize will be in the form of a cheque made out to the named prize winner. The cheque will be posted to the named prize winner via registered post within two days of the prize being claimed.
5. The prize draw will involve the generation of a random number by computer for each entry. Respondents with multiple entries will be assigned the lowest of the numbers generated for their entries. 1st prize will be awarded to the respondent with the lowest number. Runners up prizes will be awarded to the respondents with the four next lowest numbers.
6. The winners will be drawn on 19 October 2011 at 10am at the Taverner Research offices, Level 2, 88 Foveaux Street, Surrey Hills NSW 2010.
Willingness to pay research project 47
7. Prize winners will be notified by email two days after the draw and published in the public notice section of the Canberra Times on Saturday 22 October 2011. The email and notice will include Taverner Research’s contact details for winners to claim their prize.
8. In the case of an ineligible participant being drawn as the winner, a re-draw will take place immediately.
9. Except as expressly provided by these terms and conditions, the prize is not transferable, not exchangeable and cannot be redeemed as cash.
10. In the event that a prize is unclaimed, a redraw will take place at 10am on 14 December at the Taverner Research offices, Level 2, 88 Foveaux Street, Surrey Hills NSW 2010.
11. The promoter is The Australian National University ABN 52 234 063 906 and is being administered by Tobumo Pty Ltd trading as Taverner Research Company, ABN 93 003 080 500.
48 McNair, B. J. and Ward, M.B.
Appendix C: Water questionnaire
Dear respondent, Thank you for participating in this survey, which is being run by the Australian National University (ANU) in partnership with ACTEW and ActewAGL. As a household in Canberra, you are affected by decisions made by ACTEW and ActewAGL in relation to water restrictions and electricity and gas supply interruptions. Responses to this survey will be used, in a grouped, anonymous format, so that your specific responses cannot be traced back to your household. We will use them to inform decisions on investment in, and management of, water, electricity and gas services in the ACT. The ANU abides by the Privacy Act and a privacy statement can be accessed <here>. We invite you to complete up to two questionnaires on behalf of your household. The average time taken to complete each questionnaire is 15-20 minutes. Once you have completed the first questionnaire, you will be entered into the draw to win $2000 cash for 1st prize and $500 cash for four runners up. If you complete a second questionnaire, you will be entered twice more into the prize draw (to triple your chances of winning). Full terms and conditions for the prize draw can be accessed <here>. If you have any technical problems accessing the questionnaire, please contact <survey service provider> on <phone number> or by email at <email address>. If you have any enquiries about the content of the questionnaire, please contact me by email at [email protected]. If you have any concerns regarding the way in which this survey was conducted, please contact the ANU Human Research Ethics Committee on (02) 6125 7945 or by e-mail at [email protected]. Yours sincerely, Dr Ben McNair Crawford School of Economics and Government The Australian National University Canberra ACT 0200
Willingness to pay research project 49
The reason for this survey For much of the past decade, restrictions have been placed on the ways in which Canberra households are allowed to use water. The amount of time that water restrictions will need to be imposed in the future can be reduced by ACTEW and ACT Government decisions, such as:
investing in dams and other infrastructure;
investing in water recycling projects;
providing rebates for water-efficient household appliances; and
purchasing water from New South Wales via releases from the Tantangara Reservoir. However, these investments come at a cost, which must be recovered through water bills over time. We would like to know your views on this “trade-off” between lower water bills and more time spent in restrictions.
50 McNair, B. J. and Ward, M.B.
Water restrictions in the ACT The purpose of water restrictions is to reduce the risk of water supplies being exhausted as dam storage levels dropped over the course of a drought. The restriction regime applied in Canberra is based on ‘stages’ that increase in severity as dam storage levels fall. A summary of the restrictions on water use associated with each stage is provided in the following table.
Over the past eight years, households in Canberra have experienced all stages of restrictions, except Stage 4, which would involve a total ban on using potable water outdoors. Currently, households are subject to water conservation measures.
Managing water shortages When a water shortage does occur, there are different ways of managing water use. ACTEW is faced with decisions such as whether to introduce Stage 1 restrictions sooner in order to reduce the likelihood that more severe restrictions will be required later. We are interested in your views on these trade-offs between time spent in different levels (or stages) of restrictions.
SprinklersHand-held hose, bucket, or
watering canSwimming pools Vehicles
Target annual
reduction in water
use
Water Conservation
Measures
Permitted before 9am or after
6pm every dayPermitted at any time
Pools may be filled or topped
up using hose. Larger pools
must be covered when not in
use.
May be washed using a
bucket, watering can, or hand-
held hose with trigger nozzle
13%
Stage 1
Permitted for 3 hours in
morning and evening every
second day
Permitted at any time
Existing pools may be topped
up using hose. Written
exemption required to fill or
refill
May be washed no more than
once per week using a
bucket, watering can, or hand-
held hose with trigger nozzle
22%
Stage 2
Only dripper systems
permitted for 3 hours in
morning and evening every
second day
Permitted for 3 hours in
morning and evening every
second day
Existing pools may be topped
up for 3 hours in morning and
evening every second day
using hose if covered when
not in use. Written exemption
required to fill or refill
May be washed no more than
once per week using a
bucket, watering can, or hand-
held hose with trigger nozzle
35%
Stage 3 Not permitted
Permitted for 3 hours in
morning and evening every
second day
Written exemption required
for fill, refill, or top up
Permitted only at complying
commercial car wash43%
Stage 4 Not permitted Not permittedWritten exemption required
for fill, refill, or top upNot permitted 61%
State of Emergency Emergency water use only
Willingness to pay research project 51
Your input In the first part of the survey, you will be asked questions about a series of six choice situations. In each choice situation, you will be presented with three water supply packages at specified cost and asked to indicate which package you prefer. You will then be asked some questions about your views on government water use, water restrictions and water pricing. Lastly, you will be asked some questions about the characteristics of your household.
52 McNair, B. J. and Ward, M.B.
SPLIT SAMPLE B ONLY
Choosing water supply packages Currently, all households in the ACT pay the same price for water and are subject to the same restrictions on water use during water shortages. That is, ACTEW offers only one ‘package’. In this survey, we would like you to consider a situation in which ACTEW offers three packages to enable households to choose a package that suits their needs and budgets. For example, ACTEW might offer a default package, a high-security package and a budget package. Households opting for the budget package would pay a lower price and face more severe water restrictions sooner than other households. Households opting for the high-security package would pay a higher price and face less severe water restrictions later than other households. The total amount of water conserved would remain the same. The increase in water use by households choosing the high-security package would be offset by decreases in water use by households choosing the budget package. ACTEW revenue would also remain the same. The extra revenue generated by high-security water would be used to lower water bills for households choosing the budget package. For the purpose of this survey, assume that households would not be able to switch between packages when water restrictions are in place. The ACTEW Water Conservation Office would police restrictions using electronic maps indicating the package option selected by each parcel of land.
Willingness to pay research project 53
Instructions for answering the choice questions Expected time in restrictions In each choice situation, three water supply packages are described by the expected time spent at each level of restrictions over the next 20 years. The amount of time actually spent in restrictions will depend on the climate, which is uncertain. However, ACTEW decisions can influence the average outcome. It is this average or expected time in restrictions that is described in the choice situations. The timing of the restrictions within the 20 year period is not specified. Please assume that the likelihood of each level of restrictions is even over time. For example, if Stage 3 restrictions are expected to apply in 2 of the next 20 years, then you should assume that the likelihood of Stage 3 restrictions in each year is 2 in 20 (that is, 10 per cent). Example of a choice situation An example of the sort of choice situation you will be asked about in this survey is presented below. Please take a moment to consider which package you would choose.
Information to assist you in making your choice A table summarising the restrictions on use associated with each ‘stage’ can be viewed by hovering your mouse pointer over the list of restriction stages in each choice question.
CURRENT
PACKAGEPACKAGE A PACKAGE B
RESTRICTIONS ON HOUSEHOLD WATER USE
No restrictions 0 0 3
Water conservation measures 9 8 9
Stage 1 4 4 4
Stage 2 4 4 4
Stage 3 2 2 0
Stage 4 1 2 0
State of Emergency 0 0 0
THE COST TO YOUR HOUSEHOLD
$0 $100 $350
If Package A and Package B were the only two options available
to you, which option would you choose?
more than your
current bill
Expected number of years
spent in each level of
restrictions over the next 20
years:
Your ongoing annual water and sewerage bill
If these were the only three options available to you, which option
would you choose?
less than your
current bill
more than your
current bill
54 McNair, B. J. and Ward, M.B.
A graphical representation of the expected time in restrictions in the three packages will be provided below each choice situation.
What to assume about government water use During water shortages, the government can reduce its own water use by allowing the grass in parks, ovals and sports grounds, and other public spaces to ‘brown off’ or die. The government can also reduce their watering of street trees, which may result in some street trees dying and requiring replacement with younger, smaller trees. For the purpose of the choice situations, assume that these public assets are not impacted by restrictions. Your views on the impacts of reduced government water use will be recorded using separate questions later in the survey. Answering questions about hypothetical situations Experience from other studies has shown that people tend to respond differently to hypothetical situations than they would in real life situations. This is most likely because they don’t actually have to follow through with their choices in hypothetical situations. Although the situations presented in this survey are hypothetical, your responses will influence decisions about Canberra’s water supply, which may affect the amount of time spent in water restrictions and also the size of your bill. Therefore, please answer the questions as if you were really facing these decisions. Please answer the questions on behalf of your own household only. We will survey other households on their views.
0 10 20
State of Emergency
Stage 4
Stage 3
Stage 2
Stage 1
Water conservation
measures
No restrictions
Expected number of years in restrictions
over next 20 years
Current Package
0 10 20
State of Emergency
Stage 4
Stage 3
Stage 2
Stage 1
Water conservation
measures
No restrictions
Expected number of years in restrictions
over next 20 years
Package A
0 10 20
State of Emergency
Stage 4
Stage 3
Stage 2
Stage 1
Water conservation
measures
No restrictions
Expected number of years in restrictions
over next 20 years
Package B
Willingness to pay research project 55
Choice situation 1 of 6 SPLIT SAMPLE A ONLY All households in the ACT will face the same package. Your answers will inform ACTEW as to what that package should be. SPLIT SAMPLE B ONLY When making your choice, bear in mind that the chosen package would apply to your household, but not necessarily to other households. For a summary of the restrictions associated with each stage, hover your mouse pointer over the list of restriction stages in the table below. <choice situation drawn from design> Graphical representation of expected time in restrictions <graphs associated with choice situation above> Approximately what percentage of other households in Canberra do you think would have chosen the same package as you did when asked to choose between the three packages? Very few households (~5%) Some households (~25%) About half of households (~50%) Most households (~75%) Almost all households (~95%)
56 McNair, B. J. and Ward, M.B.
Choice situation 2 of 6 SPLIT SAMPLE A ONLY All households in the ACT will face the same package. Your answers will inform ACTEW as to what that package should be. SPLIT SAMPLE B ONLY When making your choice, bear in mind that the chosen package would apply to your household, but not necessarily to other households. For a summary of the restrictions associated with each stage, hover your mouse pointer over the list of restriction stages in the table below. <choice situation drawn from design> Graphical representation of expected time in restrictions <graphs associated with choice situation above> Approximately what percentage of other households in Canberra do you think would have chosen the same package as you did when asked to choose between the three packages? Very few households (~5%) Some households (~25%) About half of households (~50%) Most households (~75%) Almost all households (~95%)
Willingness to pay research project 57
Choice situation 3 of 6 SPLIT SAMPLE A ONLY All households in the ACT will face the same package. Your answers will inform ACTEW as to what that package should be. SPLIT SAMPLE B ONLY When making your choice, bear in mind that the chosen package would apply to your household, but not necessarily to other households. For a summary of the restrictions associated with each stage, hover your mouse pointer over the list of restriction stages in the table below. <choice situation drawn from design> Graphical representation of expected time in restrictions <graphs associated with choice situation above> Approximately what percentage of other households in Canberra do you think would have chosen the same package as you did when asked to choose between the three packages? Very few households (~5%) Some households (~25%) About half of households (~50%) Most households (~75%) Almost all households (~95%)
58 McNair, B. J. and Ward, M.B.
Choice situation 4 of 6 SPLIT SAMPLE A ONLY All households in the ACT will face the same package. Your answers will inform ACTEW as to what that package should be. SPLIT SAMPLE B ONLY When making your choice, bear in mind that the chosen package would apply to your household, but not necessarily to other households. For a summary of the restrictions associated with each stage, hover your mouse pointer over the list of restriction stages in the table below. <choice situation drawn from design> Graphical representation of expected time in restrictions <graphs associated with choice situation above> Approximately what percentage of other households in Canberra do you think would have chosen the same package as you did when asked to choose between the three packages? Very few households (~5%) Some households (~25%) About half of households (~50%) Most households (~75%) Almost all households (~95%)
Willingness to pay research project 59
Choice situation 5 of 6 SPLIT SAMPLE A ONLY All households in the ACT will face the same package. Your answers will inform ACTEW as to what that package should be. SPLIT SAMPLE B ONLY When making your choice, bear in mind that the chosen package would apply to your household, but not necessarily to other households. For a summary of the restrictions associated with each stage, hover your mouse pointer over the list of restriction stages in the table below. <choice situation drawn from design> Graphical representation of expected time in restrictions <graphs associated with choice situation above> Approximately what percentage of other households in Canberra do you think would have chosen the same package as you did when asked to choose between the three packages? Very few households (~5%) Some households (~25%) About half of households (~50%) Most households (~75%) Almost all households (~95%)
60 McNair, B. J. and Ward, M.B.
Choice situation 6 of 6 SPLIT SAMPLE A ONLY All households in the ACT will face the same package. Your answers will inform ACTEW as to what that package should be. SPLIT SAMPLE B ONLY When making your choice, bear in mind that the chosen package would apply to your household, but not necessarily to other households. For a summary of the restrictions associated with each stage, hover your mouse pointer over the list of restriction stages in the table below. <choice situation drawn from design> Graphical representation of expected time in restrictions <graphs associated with choice situation above> Approximately what percentage of other households in Canberra do you think would have chosen the same package as you did when asked to choose between the three packages? Very few households (~5%) Some households (~25%) About half of households (~50%) Most households (~75%) Almost all households (~95%)
Willingness to pay research project 61
Questions about how you answered the choice questions When answering the choice tasks, did you think of restrictions as being less likely at the start of the 20 year period (compared to the later part of the period)? Yes No
What would you say is the likelihood you will move away from Canberra in the next 5 years? Very likely Likely Neither likely nor unlikely Unlikely Very unlikely
Did you think that the “current package” presented in each choice situation was reasonably realistic? Yes No
IF ‘NO’ ABOVE How did you go about answering the questions given you found the “current package” to be unrealistic? I suspended my disbelief and answered the question as though the “current package” was
realistic I answered the question as though the “current package” was a different, more realistic
package Did you think that any of the packages presented would be impossible for ACTEW to deliver? Yes No
IF ‘YES’ ABOVE How did you go about answering the question(s) with unrealistic packages? I suspended my disbelief and answered the question as though ACTEW would be able to
deliver the package I answered the question as though ACTEW would deliver a different, more realistic package
IF SELECTED ‘CURRENT PACKAGE’ IN EVERY CHOICE QUESTION Why did you select the current package in every choice situation? (tick as many as apply)
Other people in my neighbourhood would think poorly of me if I chose the other options
I didn’t have enough time to properly evaluate the options
I didn’t have enough information to be confident choosing the options
I disagree with the notion of people paying to avoid water restrictions
I disagree with the notion of offering people money to face more water restrictions
I expect ACTEW would implement the bill increases shown without delivering the associated service improvements
I expect ACTEW would implement service reductions without delivering the associated bill decreases
Other
62 McNair, B. J. and Ward, M.B.
IF NEVER SELECTED ‘CURRENT PACKAGE’ Why did you always select Package A or Package B and never the “current package”? (tick as many as apply)
I didn’t think I was allowed to choose the “current package”
I want to keep different options under ACTEW consideration so that I will have more choice in the future
Other How do you think your preferences compare to those of other households in Canberra? Most other households would have similar preferences to mine Most other households would be willing to pay more than I would to avoid restrictions Few households would be willing to pay as much as I would to avoid restrictions
What is your understanding of the way in which the results of this survey will be used to inform ACTEW policy?
To inform a decision on a package to apply to the whole community
To inform a decision on a set of packages from which households would be able to choose a package to suit their needs and budget
The results of this survey will not influence ACTEW policy
Willingness to pay research project 63
Questions about government water use During water shortages, the government can reduce its own water use by allowing the grass in parks, ovals and sports grounds, and other public spaces to ‘brown off’ or die. The sooner these reductions in government water use take place during a drought, the less severe are the restrictions required on households. We are interested in your views on this trade-off between restrictions on household and government water use. In your view, when should each of the following measures be introduced? (Please tick one box in each row) Measure B
efore w
ater
con
servation
m
easures
With
water
con
servation
m
easures
With
Stage 1
With
Stage 2
With
Stage 3
With
Stage 4
After Stage 4
Half of ovals and sports grounds are allowed to brown off
□ □ □ □ □ □ □
All ovals and sports grounds are allowed to brown off
□ □ □ □ □ □ □
Half of parks and public spaces are allowed to brown off
□ □ □ □ □ □ □
All parks and public spaces are allowed to brown off
□ □ □ □ □ □ □
5% of street trees are allowed to die each year due to drought
□ □ □ □ □ □ □
10% of street trees are allowed to die each year due to drought
□ □ □ □ □ □ □
When answering the questions above, did you consider the effects of the measures on:
My household only
Mainly my household, but also other households
Mainly other households, but also my household
Other households only
64 McNair, B. J. and Ward, M.B.
Your views on water Please indicate the extent to which you agree or disagree with each of the following statements: Stro
ngly
disagre
e
Disagree
Do
n’t kn
ow
/
un
sure
Agree
Stron
gly
agree
Households should be able to buy exemptions from water restrictions, with the raised funds given as rebates to households that do face restrictions.
□ □ □ □ □
Others in my neighbourhood would think poorly of me if I wasn’t facing restrictions and they were.
□ □ □ □ □
It would mostly be people with a lack of concern for the community that would pay to avoid water restrictions.
□ □ □ □ □
When water restrictions are not in place, I get enjoyment from seeing green gardens and lawns in my neighbourhood.
□ □ □ □ □
When water restrictions are in place, I get enjoyment from seeing green gardens and lawns in my neighbourhood.
□ □ □ □ □
Water conservation measures should apply permanently to stop households from wasting water, even when the dams are full.
□ □ □ □ □
I avoid some desired uses of water because I am worried about what my neighbours will think.
□ □ □ □ □
I feel a sense of community spirit with my fellow Canberrans when we all pull together to conserve water.
□ □ □ □ □
Stage 3 restrictions (or above) will not be required at any time over the next 20 years.
□ □ □ □ □
Before answering this questionnaire, I was familiar with the restrictions on water use associated with each ‘stage’ of water restrictions in the ACT.
□ □ □ □ □
The ‘per kilolitre’ price of water should be lower when the dams are full and higher during water shortages.
□ □ □ □ □
The ‘per kilolitre’ price of water should jump up once a certain level of water use has been reached by a household each quarter.
□ □ □ □ □
Willingness to pay research project 65
Questions about your water service Please approximate the total of your water and sewerage bills over the past 12 months by providing a range within which you are reasonably confident the total would lie. There is no need to look back at your actual bills. I estimate the total of my water and sewerage bills over the past 12 months would be between
and
Please tick if you did look back at your actual bills Prior to completing this questionnaire, to what level of detail would you have been able to recall amounts on your most recent water and sewerage bill (without looking back at your actual bill)?
I don’t recall any amounts
The total bill amount
The water and sewerage components of the bill
The sewerage supply charge, water supply charge, and total water consumption charges
The sewerage supply charge, water supply charge, my consumption in kilolitres, and the price of water in dollars per kilolitre
Please indicate whether you have taken each of the following actions at any time over the past eight years (tick as many boxes as apply):
Purchased equipment for more efficient outside water use
Installed low-flow inside plumbing equipment
Re-landscaped your garden to use less water
Removed an irrigation system
Bought or installed a water efficient appliance inside the house
Installed permanent system for capturing grey water
Installed a rain water tank
Removed a swimming pool Please indicate how the recent period of water restrictions affected your household (tick as many boxes as apply):
My lawn died
Some plants in my garden died
Many plants in my garden died
I spent more time watering my garden by hand
My car was dirty more often
I spent less leisure time outdoors
I stopped using my swimming pool
66 McNair, B. J. and Ward, M.B.
ON FIRST QUESTIONNAIRE COMPLETED BY EACH RESPONDENT
Questions about your household In which year were you born?
What is your gender? Male Female
How many persons live in your household?
How many of those persons are under the age of 15? What is the highest level of education you have obtained (so far)? Less than year 10 Year 10 Year 12 Diploma or certificate Undergraduate/bachelor degree Postgraduate degree Please approximate your annual personal income from all sources before tax. All answers in this survey are strictly confidential. Less than $25,000 $25,000 - $44,999 $45,000 - $64,999 $65,000 - $129,999 $130,000 - $189,999 $190,000 - $249,999 $250,000 - $320,000 Over $320,000 I refuse to provide this information Please approximate your annual household income from all sources before tax. All answers in this survey are strictly confidential. $1-$12,999 $13,000-$25,999 $26,000-$41,999 $42,000-$61,999 $62,000-$87,999 $88,000-$129,999 $130,000-$181,999 $182,000 or more I refuse to provide this information It would be very helpful to know the details of your residence; for example, it would allow us to match survey responses to usage patterns. This information would be used for this specific research
Willingness to pay research project 67
project only and would be analysed in a grouped, anonymous format, so that your specific responses cannot be traced back to your household. Please confirm your street address details:
NUMBER _____ STREET __________________________
SUBURB _____________________ POSTCODE _______
Do you consent to being contacted by email regarding other ANU research surveys in the future? Yes No
If yes, please provide your email address:
Thank you Thank you for participating in this survey. Your opinions are very important. To submit your responses and be automatically entered into the cash prize draw, please click the ‘submit’ button below. You will then have an opportunity to complete a second questionnaire on a different topic for two more entries into the prize draw. <submit button> ON SECOND QUESTIONNAIRE COMPLETED BY EACH RESPONDENT
Thank you Thank you for participating in this survey. Your opinions are very important. To submit your responses and be automatically entered twice more into the cash prize draw, please click the ‘submit’ button below. <submit button>
68 McNair, B. J. and Ward, M.B.
ON FIRST QUESTIONNAIRE COMPLETED BY EACH RESPONDENT
Thank you You have been automatically entered into the prize draw (ACT TP XX/XXXXX). The prizes are: 1st prize: $2000 4 runners up: $500 Prize winners will be notified by email on XX/XX/2011 and published in the public notice section of the Canberra Times on Saturday XX/XX/2011. The email and notice will include <service provider> contact details for winners to claim their prize. Each prize will be in the form of a cheque made out to the named prize winner. The cheque will be posted to the named prize winner via registered post within two days of the prize being claimed. Full terms and conditions are attached to the email from <service provider> inviting you to participate in this survey.
Would you be willing to complete another questionnaire? If you complete another questionnaire on a different topic, you will be entered twice more into the prize draw (to triple your chances of winning). To be directed to a second questionnaire, please click on the link below. <link to second questionnaire> ON SECOND QUESTIONNAIRE COMPLETED BY EACH RESPONDENT
Thank you You have been automatically entered twice more into the prize draw (ACT TP XX/XXXXX). The prizes are: 1st prize: $2000 4 runners up: $500 Prize winners will be notified by email on XX/XX/2011 and published in the public notice section of the Canberra Times on Saturday XX/XX/2011. The email and notice will include <service provider> contact details for winners to claim their prize. Each prize will be in the form of a cheque made out to the named prize winner. The cheque will be posted to the named prize winner via registered post within two days of the prize being claimed. Full terms and conditions are attached to the email from <service provider> inviting you to participate in this survey.
Willingness to pay research project 69
Appendix D: Water experimental designs
Key
Version Experimental design version
s Question ID
j Alternative ID
WCM Number of year in water conservation measures per 20 years
Stage 1 Number of years in Stage 1 restrictions per 20 years
Stage 2 Number of years in Stage 2 restrictions per 20 years
Stage 3 Number of years in Stage 3 restrictions per 20 years
Stage 4 Number of years in Stage 4 restrictions per 20 years
Bill Change in ongoing annual water and sewerage bill
Version s j WCM Stage1 Stage2 Stage3 Stage4 Bill
1 1 1 14 2 2 2 0 0
1 1 2 6 4 6 2 2 -50
1 1 3 8 2 2 0 0 200
1 2 1 14 2 2 2 0 0
1 2 2 7 4 6 2 1 -400
1 2 3 2 0 0 0 0 150
1 3 1 14 2 2 2 0 0
1 3 2 8 6 2 4 0 -150
1 3 3 14 0 1 0 0 200
1 4 1 14 2 2 2 0 0
1 4 2 12 2 2 2 2 -250
1 4 3 2 1 2 2 0 100
1 5 1 14 2 2 2 0 0
1 5 2 12 2 2 3 1 -200
1 5 3 8 0 0 1 0 100
1 6 1 14 2 2 2 0 0
1 6 2 6 6 6 2 0 -100
1 6 3 14 0 1 1 0 150
1 7 1 14 2 2 2 0 0
1 7 2 6 4 4 4 2 -150
1 7 3 14 1 2 1 0 150
1 8 1 14 2 2 2 0 0
1 8 2 8 6 2 4 0 -150
1 8 3 8 1 1 2 0 200
1 9 1 14 2 2 2 0 0
1 9 2 8 4 4 3 1 -150
1 9 3 2 1 1 2 0 150
1 10 1 14 2 2 2 0 0
1 10 2 9 4 4 3 0 -100
1 10 3 2 2 1 0 0 100
1 11 1 14 2 2 2 0 0
1 11 2 2 6 6 4 2 -300
1 11 3 14 2 0 2 0 200
1 12 1 14 2 2 2 0 0
1 12 2 9 2 6 2 1 -350
1 12 3 14 0 1 2 0 50
1 13 1 14 2 2 2 0 0
1 13 2 9 2 4 3 2 -100
1 13 3 2 2 0 2 0 100
70 McNair, B. J. and Ward, M.B.
Version s j WCM Stage1 Stage2 Stage3 Stage4 Bill
1 14 1 14 2 2 2 0 0
1 14 2 9 6 2 2 1 -200
1 14 3 8 2 0 0 0 100
1 15 1 14 2 2 2 0 0
1 15 2 8 6 4 2 0 -350
1 15 3 2 0 2 1 0 100
1 16 1 14 2 2 2 0 0
1 16 2 12 2 2 4 0 -100
1 16 3 14 1 2 1 0 200
1 17 1 14 2 2 2 0 0
1 17 2 6 4 6 3 1 -300
1 17 3 8 0 1 2 0 100
1 18 1 14 2 2 2 0 0
1 18 2 9 4 2 4 1 -250
1 18 3 8 2 0 1 0 150
1 19 1 14 2 2 2 0 0
1 19 2 5 6 4 3 2 -400
1 19 3 8 2 2 0 0 150
1 20 1 14 2 2 2 0 0
1 20 2 10 2 4 4 0 -50
1 20 3 14 1 0 1 0 200
1 21 1 14 2 2 2 0 0
1 21 2 7 2 6 3 2 -250
1 21 3 2 1 2 0 0 50
1 22 1 14 2 2 2 0 0
1 22 2 10 2 6 2 0 -50
1 22 3 2 2 1 2 0 50
1 23 1 14 2 2 2 0 0
1 23 2 8 8 2 2 0 -100
1 23 3 14 0 2 2 0 100
1 24 1 14 2 2 2 0 0
1 24 2 4 6 8 2 0 -150
1 24 3 8 1 0 2 0 50
1 25 1 9 4 4 2 1 0
1 25 2 6 4 6 2 2 -200
1 25 3 3 0 4 2 1 100
1 26 1 9 4 4 2 1 0
1 26 2 3 6 6 4 1 -50
1 26 3 3 4 2 2 1 250
1 27 1 9 4 4 2 1 0
1 27 2 6 6 4 3 1 -100
1 27 3 6 0 0 2 0 400
1 28 1 9 4 4 2 1 0
1 28 2 5 4 6 4 1 -200
1 28 3 3 2 0 0 1 350
1 29 1 9 4 4 2 1 0
1 29 2 4 6 6 2 2 -100
1 29 3 9 4 4 2 0 200
1 30 1 9 4 4 2 1 0
1 30 2 6 4 4 4 2 -200
1 30 3 3 4 4 0 1 400
1 31 1 9 4 4 2 1 0
1 31 2 4 6 4 4 2 -150
1 31 3 6 0 2 2 0 200
1 32 1 9 4 4 2 1 0
1 32 2 7 4 4 3 2 -100
1 32 3 6 2 4 2 0 300
1 33 1 9 4 4 2 1 0
1 33 2 6 4 4 4 2 -150
1 33 3 3 2 0 0 0 300
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Version s j WCM Stage1 Stage2 Stage3 Stage4 Bill
1 34 1 9 4 4 2 1 0
1 34 2 4 6 6 3 1 -100
1 34 3 9 4 2 0 1 350
1 35 1 9 4 4 2 1 0
1 35 2 7 4 4 4 1 -100
1 35 3 9 0 4 0 0 50
1 36 1 9 4 4 2 1 0
1 36 2 3 6 6 3 2 -100
1 36 3 9 4 0 0 1 50
1 37 1 9 4 4 2 1 0
1 37 2 7 6 4 2 1 -150
1 37 3 3 0 0 0 1 150
1 38 1 9 4 4 2 1 0
1 38 2 8 4 4 2 2 -150
1 38 3 6 4 4 0 0 300
1 39 1 9 4 4 2 1 0
1 39 2 8 4 4 2 2 -100
1 39 3 9 4 4 0 0 350
1 40 1 9 4 4 2 1 0
1 40 2 4 6 6 2 2 -150
1 40 3 3 0 2 2 0 50
1 41 1 9 4 4 2 1 0
1 41 2 6 4 6 3 1 -200
1 41 3 9 2 2 0 0 150
1 42 1 9 4 4 2 1 0
1 42 2 6 6 4 3 1 -150
1 42 3 6 0 0 0 1 350
1 43 1 9 4 4 2 1 0
1 43 2 3 6 6 4 1 -50
1 43 3 9 2 0 2 1 100
1 44 1 9 4 4 2 1 0
1 44 2 6 4 6 3 1 -150
1 44 3 6 2 2 2 0 100
1 45 1 9 4 4 2 1 0
1 45 2 8 4 4 2 2 -150
1 45 3 6 2 2 2 1 150
1 46 1 9 4 4 2 1 0
1 46 2 5 8 4 2 1 -50
1 46 3 6 0 4 2 1 50
1 47 1 9 4 4 2 1 0
1 47 2 3 6 8 2 1 -50
1 47 3 9 4 0 2 1 100
1 48 1 9 4 4 2 1 0
1 48 2 7 4 6 2 1 -100
1 48 3 3 2 2 2 1 150
2 1 1 14 2 2 2 0 0
2 1 2 10 6 4 0 0 -50
2 1 3 8 0 0 2 0 100
2 2 1 14 2 2 2 0 0
2 2 2 14 4 2 0 0 100
2 2 3 12 2 2 4 0 -150
2 3 1 14 2 2 2 0 0
2 3 2 10 2 6 0 2 -200
2 3 3 8 0 2 0 0 150
2 4 1 14 2 2 2 0 0
2 4 2 8 0 0 2 0 250
2 4 3 9 2 6 2 1 -350
2 5 1 14 2 2 2 0 0
2 5 2 15 0 4 0 1 -250
2 5 3 8 0 2 0 0 250
72 McNair, B. J. and Ward, M.B.
Version s j WCM Stage1 Stage2 Stage3 Stage4 Bill
2 6 1 14 2 2 2 0 0
2 6 2 14 2 0 0 0 100
2 6 3 6 6 4 4 0 0
2 7 1 14 2 2 2 0 0
2 7 2 4 4 6 4 2 -150
2 7 3 2 2 2 0 0 0
2 8 1 14 2 2 2 0 0
2 8 2 2 2 2 0 0 150
2 8 3 8 6 2 2 2 -100
2 9 1 14 2 2 2 0 0
2 9 2 8 2 6 4 0 -350
2 9 3 14 0 0 2 0 100
2 10 1 14 2 2 2 0 0
2 10 2 2 2 4 2 0 0
2 10 3 10 4 2 4 0 -200
2 11 1 14 2 2 2 0 0
2 11 2 10 4 2 2 2 -100
2 11 3 14 0 0 0 0 50
2 12 1 14 2 2 2 0 0
2 12 2 8 2 0 0 0 0
2 12 3 12 0 4 4 0 -150
2 13 1 14 2 2 2 0 0
2 13 2 12 2 4 2 0 -250
2 13 3 8 0 0 2 0 250
2 14 1 14 2 2 2 0 0
2 14 2 2 0 0 0 0 50
2 14 3 8 6 0 4 2 0
2 15 1 14 2 2 2 0 0
2 15 2 9 6 0 4 1 -350
2 15 3 14 0 0 2 0 50
2 16 1 14 2 2 2 0 0
2 16 2 2 2 2 2 0 50
2 16 3 12 0 4 2 2 0
2 17 1 14 2 2 2 0 0
2 17 2 7 4 6 2 1 -250
2 17 3 14 0 2 0 0 100
2 18 1 14 2 2 2 0 0
2 18 2 14 2 2 2 0 50
2 18 3 9 6 0 4 1 -200
2 19 1 14 2 2 2 0 0
2 19 2 11 4 2 2 1 -50
2 19 3 2 2 2 2 0 50
2 20 1 14 2 2 2 0 0
2 20 2 8 2 2 2 0 100
2 20 3 8 2 6 2 2 -50
2 21 1 14 2 2 2 0 0
2 21 2 11 4 2 2 1 -100
2 21 3 2 2 0 4 0 150
2 22 1 14 2 2 2 0 0
2 22 2 14 4 0 2 0 50
2 22 3 14 0 4 2 0 -100
2 23 1 14 2 2 2 0 0
2 23 2 2 8 8 2 0 0
2 23 3 2 2 0 2 0 0
2 24 1 14 2 2 2 0 0
2 24 2 8 0 2 2 0 100
2 24 3 14 4 0 2 0 -50
2 25 1 9 4 4 2 1 0
2 25 2 4 6 4 4 2 0
2 25 3 6 4 4 0 0 100
Willingness to pay research project 73
Version s j WCM Stage1 Stage2 Stage3 Stage4 Bill
2 26 1 9 4 4 2 1 0
2 26 2 6 0 4 0 1 50
2 26 3 6 6 4 2 2 -100
2 27 1 9 4 4 2 1 0
2 27 2 7 6 4 2 1 -100
2 27 3 9 6 2 0 0 200
2 28 1 9 4 4 2 1 0
2 28 2 12 4 2 2 0 300
2 28 3 13 4 2 0 1 -200
2 29 1 9 4 4 2 1 0
2 29 2 11 4 4 0 1 -100
2 29 3 12 2 4 2 0 300
2 30 1 9 4 4 2 1 0
2 30 2 9 0 6 0 1 0
2 30 3 9 4 4 2 1 -100
2 31 1 9 4 4 2 1 0
2 31 2 6 6 2 4 2 -50
2 31 3 6 0 6 0 0 0
2 32 1 9 4 4 2 1 0
2 32 2 9 2 0 2 1 300
2 32 3 4 4 6 4 2 -200
2 33 1 9 4 4 2 1 0
2 33 2 5 6 4 4 1 -50
2 33 3 3 0 4 2 1 0
2 34 1 9 4 4 2 1 0
2 34 2 3 6 4 2 0 400
2 34 3 6 4 6 2 2 0
2 35 1 9 4 4 2 1 0
2 35 2 5 4 6 4 1 -100
2 35 3 3 2 2 2 0 100
2 36 1 9 4 4 2 1 0
2 36 2 3 0 2 0 0 400
2 36 3 7 4 4 4 1 0
2 37 1 9 4 4 2 1 0
2 37 2 5 6 6 2 1 -100
2 37 3 9 4 0 0 0 200
2 38 1 9 4 4 2 1 0
2 38 2 3 4 2 2 0 50
2 38 3 6 6 6 0 2 -50
2 39 1 9 4 4 2 1 0
2 39 2 3 6 6 4 1 -50
2 39 3 6 2 0 2 1 150
2 40 1 9 4 4 2 1 0
2 40 2 9 4 0 0 1 50
2 40 3 10 2 4 2 2 0
2 41 1 9 4 4 2 1 0
2 41 2 6 2 6 4 2 -50
2 41 3 6 0 4 2 0 100
2 42 1 9 4 4 2 1 0
2 42 2 12 6 0 0 1 150
2 42 3 10 4 2 2 2 -200
2 43 1 9 4 4 2 1 0
2 43 2 5 6 6 2 1 0
2 43 3 9 2 0 4 1 200
2 44 1 9 4 4 2 1 0
2 44 2 6 2 6 0 1 400
2 44 3 8 2 4 4 2 0
2 45 1 9 4 4 2 1 0
2 45 2 6 4 6 2 2 -50
2 45 3 3 4 2 2 1 150
74 McNair, B. J. and Ward, M.B.
Version s j WCM Stage1 Stage2 Stage3 Stage4 Bill
2 46 1 9 4 4 2 1 0
2 46 2 9 0 0 2 1 0
2 46 3 1 8 8 2 1 -50
2 47 1 9 4 4 2 1 0
2 47 2 17 0 0 2 1 -100
2 47 3 6 2 6 2 1 50
2 48 1 9 4 4 2 1 0
2 48 2 3 4 2 2 1 150
2 48 3 5 6 6 2 1 0
3 1 1 14 2 2 2 0 0
3 1 2 13 0 0 6 1 -150
3 1 3 8 0 0 0 0 100
3 2 1 14 2 2 2 0 0
3 2 2 16 0 2 2 0 100
3 2 3 6 4 6 4 0 -150
3 3 1 14 2 2 2 0 0
3 3 2 8 2 4 6 0 -200
3 3 3 8 0 0 0 0 0
3 4 1 14 2 2 2 0 0
3 4 2 14 2 2 0 0 100
3 4 3 10 0 6 4 0 -300
3 5 1 14 2 2 2 0 0
3 5 2 11 0 4 4 1 0
3 5 3 2 4 4 0 0 100
3 6 1 14 2 2 2 0 0
3 6 2 14 0 0 2 0 150
3 6 3 12 2 0 4 2 -100
3 7 1 14 2 2 2 0 0
3 7 2 2 4 6 6 2 50
3 7 3 2 0 2 2 0 50
3 8 1 14 2 2 2 0 0
3 8 2 14 2 2 0 0 100
3 8 3 13 2 0 4 1 -50
3 9 1 14 2 2 2 0 0
3 9 2 10 0 4 6 0 -400
3 9 3 14 2 4 0 0 50
3 10 1 14 2 2 2 0 0
3 10 2 2 2 0 2 0 50
3 10 3 14 0 4 0 2 -150
3 11 1 14 2 2 2 0 0
3 11 2 10 4 0 6 0 -100
3 11 3 2 4 0 0 0 100
3 12 1 14 2 2 2 0 0
3 12 2 2 2 4 0 0 100
3 12 3 6 2 6 6 0 -50
3 13 1 14 2 2 2 0 0
3 13 2 6 4 4 6 0 -50
3 13 3 8 4 0 0 0 100
3 14 1 14 2 2 2 0 0
3 14 2 14 4 0 2 0 50
3 14 3 8 0 6 4 2 -400
3 15 1 14 2 2 2 0 0
3 15 2 13 2 0 4 1 -300
3 15 3 8 4 2 0 0 -50
3 16 1 14 2 2 2 0 0
3 16 2 14 0 4 2 0 50
3 16 3 9 4 0 6 1 -200
3 17 1 14 2 2 2 0 0
3 17 2 5 4 6 4 1 -100
3 17 3 8 4 2 0 0 50
Willingness to pay research project 75
Version s j WCM Stage1 Stage2 Stage3 Stage4 Bill
3 18 1 14 2 2 2 0 0
3 18 2 2 2 0 2 0 -100
3 18 3 12 0 0 6 2 -200
3 19 1 14 2 2 2 0 0
3 19 2 13 2 4 0 1 -300
3 19 3 8 4 0 0 0 50
3 20 1 14 2 2 2 0 0
3 20 2 8 0 2 2 0 50
3 20 3 12 2 4 0 2 -400
3 21 1 14 2 2 2 0 0
3 21 2 4 4 6 4 2 0
3 21 3 2 0 2 2 0 150
3 22 1 14 2 2 2 0 0
3 22 2 2 4 0 2 0 -50
3 22 3 8 4 6 2 0 0
3 23 1 14 2 2 2 0 0
3 23 2 14 0 4 2 0 -50
3 23 3 18 0 0 2 0 100
3 24 1 14 2 2 2 0 0
3 24 2 8 2 2 2 0 0
3 24 3 12 6 0 2 0 -100
3 25 1 9 4 4 2 1 0
3 25 2 10 2 0 6 2 -200
3 25 3 3 2 4 0 0 50
3 26 1 9 4 4 2 1 0
3 26 2 6 0 0 0 1 100
3 26 3 7 0 6 6 1 -150
3 27 1 9 4 4 2 1 0
3 27 2 8 0 6 4 2 -50
3 27 3 3 2 6 2 1 100
3 28 1 9 4 4 2 1 0
3 28 2 6 2 4 2 0 250
3 28 3 6 0 6 6 2 -50
3 29 1 9 4 4 2 1 0
3 29 2 9 2 4 4 1 -200
3 29 3 3 6 0 0 0 250
3 30 1 9 4 4 2 1 0
3 30 2 6 0 6 0 0 200
3 30 3 4 6 4 4 2 -200
3 31 1 9 4 4 2 1 0
3 31 2 14 0 0 4 2 -50
3 31 3 3 0 6 2 0 150
3 32 1 9 4 4 2 1 0
3 32 2 3 0 0 0 1 50
3 32 3 11 0 4 4 1 -100
3 33 1 9 4 4 2 1 0
3 33 2 12 6 0 0 2 -250
3 33 3 12 2 2 0 0 0
3 34 1 9 4 4 2 1 0
3 34 2 3 0 2 0 1 150
3 34 3 7 6 0 6 1 50
3 35 1 9 4 4 2 1 0
3 35 2 11 2 0 6 1 -100
3 35 3 9 0 4 2 1 200
3 36 1 9 4 4 2 1 0
3 36 2 12 2 0 2 0 200
3 36 3 5 2 6 6 1 -250
3 37 1 9 4 4 2 1 0
3 37 2 3 6 6 4 1 -150
3 37 3 9 6 4 0 0 150
76 McNair, B. J. and Ward, M.B.
Version s j WCM Stage1 Stage2 Stage3 Stage4 Bill
3 38 1 9 4 4 2 1 0
3 38 2 9 2 0 2 1 50
3 38 3 11 2 6 0 1 0
3 39 1 9 4 4 2 1 0
3 39 2 2 6 6 4 2 0
3 39 3 6 0 0 2 0 100
3 40 1 9 4 4 2 1 0
3 40 2 9 0 4 0 1 -50
3 40 3 10 2 0 6 2 -100
3 41 1 9 4 4 2 1 0
3 41 2 8 6 4 0 2 -150
3 41 3 9 0 2 2 1 150
3 42 1 9 4 4 2 1 0
3 42 2 12 2 2 0 0 200
3 42 3 3 6 4 6 1 -200
3 43 1 9 4 4 2 1 0
3 43 2 8 2 4 4 2 -100
3 43 3 6 2 2 2 0 -100
3 44 1 9 4 4 2 1 0
3 44 2 9 6 2 0 1 100
3 44 3 9 0 4 6 1 -50
3 45 1 9 4 4 2 1 0
3 45 2 14 0 0 4 2 -150
3 45 3 6 2 4 2 1 50
3 46 1 9 4 4 2 1 0
3 46 2 3 6 2 2 1 0
3 46 3 3 6 8 2 1 -50
3 47 1 9 4 4 2 1 0
3 47 2 11 0 6 2 1 0
3 47 3 6 2 0 2 1 -100
3 48 1 9 4 4 2 1 0
3 48 2 9 0 6 2 1 -50
3 48 3 15 2 0 2 1 -100
Willingness to pay research project 77
Appendix E: Peer review
Professor Riccardo Scarpa
Department of Economics
Waikato Management School
University of Waikato, Hamilton,
New Zealand
Tel. +64-(0)7-838-4848
1 December, 2011
Peer Review of Willingness to Pay Research Project
To whom it may concern,
I write to communicate my involvement and professional assessment as an independent
expert peer reviewer of the study undertaken by the Australian National University in relation
to households’ willingness to pay (WTP) for changes in utilities services in the Australian
Capital Territory. I engaged in consultation and dialogue with Dr. Benjamin McNair and Dr.
Michael Ward at several stages in the conduction of this study. In particular, I reviewed the
technical details of all of the experimental designs. I found the resulting designs employed in
each survey to be well grounded in the theory and practice of experimental design for stated
choice data collection. I was also involved in evaluating the various model estimation
procedures. In that context I was able to independently replicate the initial models from
which, after an adequate specification search, the more advanced models used to obtain WTP
estimates described in the report for ACTEW and ActewAGL were obtained. I reviewed the
congruence of the interpretation of the statistical model results for policy recommendation
and found it robust and coherent with my understanding of these models.
With the information in my possession I am satisfied that the report goes further than the state
of practice in commercial consultancy environments in non market valuation studies via
stated choice data. In fact, the techniques used in this study go beyond commonly established
practice and include approaches at the forefront of the discipline, which many, including
myself, would consider state of the art. Overall I am satisfied with the quality of the report
and the supporting data analysis and specification search.
Sincerely yours,
Riccardo Scarpa
Willingness to pay research project: draft report 79
Glossary
Cheap talk script A short paragraph in a questionnaire instructing respondents to answer the
hypothetical questions as though they were real situations.
Contingent valuation A stated preference survey technique in which respondents are asked to consider
how much they are willing to pay for a benefit (or how much they are willing to
accept as compensation for a cost).
Dichotomous choice A choice between two jointly exhaustive and mutually exclusive alternatives.
Endogeneity Correlation between a variable and the error term in an econometric model.
Heterogeneity Extent of variation; disparateness; diversity.
Likert scale A symmetric agree-disagree scale; for example, “strongly agree”, “agree”, “don’t
know”, “disagree”, “strongly disagree”.
WTA Willingness to accept
WTP Willingness to pay
80 McNair, B. J. and Ward, M.B.
References
Accent (2003). Expectations of electricity DNOs & WTP for improvements in service: stage 1 quantitative research findings, OFGEM. --- (2008). Expectations of DNOs & willingness to pay for improvements in service, OFGEM. Ajodhia, V. S. (2006). Regulating Beyond Price: Integrated Price-Quality Regulation for Electricity Distribution Networks. College voor Promoties. Amsterdam, Technische Universiteit Delft. elektrotechnisch ingenieur. Bierlaire, M. (2003). BIOGEME: A free package for the estimation of discrete choice models. Proceedings of the 3rd Swiss Transportation Research Conference, Ascona, Switzerland. Carlsson, F. and P. Martinsson (2008). "Does it matter when a power outage occurs? A choice experiment study on the WTP to avoid power outages." Energy Economics 30(3): 1232-1245. Carson, R. T. and T. Groves (2007). "Incentive and informational properties of preference questions." Environmental and Resource Economics 37: 181-210. Carson, R. T., T. Groves and J. List (2006). Probabilistic influence and supplemental benefits: a field test of the two key assumptions behind using stated preferences. Unpublished manuscript. Centre for International Economics (1997). A Study to Assess Environmental Values Associated with Water Supply Options, ACTEW. --- (2008). Technical document: Updated estimates of the cost of water restrictions in the ACT region, ActewAGL. Giannakis, D., T. Jamasb and M. Pollitt (2005). "Benchmarking and incentive regulation of quality of service: an application to the UK electricity distribution networks." Energy Policy 33: 2256-2271. Kelly, R. A. and M. Alford (2010). A Review of Customer Willingness to Pay for Service Standards, isNRM Pty Ltd and The Australian National University. KPMG (2003). Consumer preferences for electricity service standards, Essential Services Commission of South Australia. McNair, B. J., J. Bennett, D. A. Hensher and J. M. Rose (2011). "Households’ willingness to pay for overhead-to-underground conversion of electricity distribution networks." Energy Policy 39(5): 2560-2567. NERA Economic Consulting and ACNielsen (2003). Willingness to pay research study, ACTEW Corporation and ActewAGL. Netherlands Competition Authority (2006). Decision in relation to the method for determining the quality term. Method Decision 102282-21.
Willingness to pay research project: draft report 81
Willis, K. G., R. Scarpa and M. Acutt (2005). "Assessing water company customer preferences and willingness to pay for service improvements: A stated choice analysis." Water Resources Research 41.