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## Print version ISSN 2007-0934

### Rev. Mex. Cienc. Agríc vol.7 n.6 Texcoco Aug./Sep. 2016

Investigation notes

Economic valuation of drinking water in Iztapalapa, D. F.

1Doctorado en Ciencias en Economía Agrícola- DICEA-Universidad Autónoma Chapingo. Carretera México-Texcoco, km 38.5, C. P. 56230. Tel. 595 95 2 16 68.

2Consultor independiente. Calle Arboledas No. 28, Montecillo Texcoco, Estado de México. C. P. 56264. (cuevas_cristobal@hotmail.com). Tel: 5523942118.

3Preparatoria Agrícola-Universidad Autónoma Chapingo. Carretera México-Texcoco km 38.5 C. P. 56230.

4Centro de Estudios de Cuenca-Universidad de California- Davis.

Abstract

The research addresses the problem of drinking water that exists in Iztapalapa from Mexico City. Iztapalapa delegation is the most populous and the one presenting most drinking water problems in Mexico City. The problems affect the entire delegation, especially highly marginalized areas such as those found in the foothills of the Sierra de Santa Catarina, San Juan and San Lorenzo Tezonco. The main problems are quality and scarcity. The contingent valuation method was used to estimate the willingness to pay (DAP) of residents by improving water quality. A survey was applied to 95 users. 42% of respondents had the perception that water pollution is high, 38% of pollution is regular and 12% said that water pollution is very high. Regarding water scarcity, 39% said that this is high, 42% that is regular and 12% which is very high. The estimated average of willingness to pay was $5.00 dolars per bimester, obtianing an approximate economic value of$ 13.25 million dollars per year for the payment of water. The variables that best explained the model were price, age, education and gender. Variables like marital status, family size, income, perceived water quality and water scarcity perceived were excluded as these did not have an explanation from the model for 95% of reliability.

Keywords: contingent valuation; water quality; willingness to pay; water scarcity; use value

Resumen

La investigación aborda la problemática del agua potable que existe en la delegación Iztapalapa de la Ciudad de México. Iztapalapa es la delegación más poblada y la que más problemas de agua potable presenta en la Ciudad de México. Los problemas afectan a toda la delegación, sobre todo a las zonas de alta marginalidad como son las que se encuentra en las faldas de la sierra de Santa Catarina, paraje San Juan y San Lorenzo Tezonco. Los problemas principales son la calidad y escasez del agua. Se utilizó el método de valoración contingente para estimar la disponibilidad a pagar (DAP) de los habitantes por mejoras en la calidad del agua. Se realizó una encuesta en la que se entrevistó a 95 usuarios. El 42% de los entrevistados tuvo la percepción de que la contaminación del agua es alta, 38% de que la contaminación es regular y 12% manifestó que la contaminación del agua es muy alta. En cuanto a la escasez del agua, 39% señaló que esta es alta, 42% que es regular y 12% que es muy alta. La disponibilidad a pagar promedio estimada fue de $5.00 dólares por bimestre, pudiendo obtener un valor económico aproximado de$13.25 millones de dólares por año por el pago del agua. Las variables que mejor explicaron el modelo fueron precio, edad, escolaridad y sexo. Se excluyeron las variables de estado civil, tamaño familiar, ingreso, calidad del agua percibida y escasez del agua percibida ya que estas no tenian una explicacion del modelo para un 95% de confiablidad.

Palabras clave: calidad del agua; disponibilidad a pagar; escasez del agua; valor de uso; valoración contingente

Introduction

In the population census from 2010 indicated 112 336 538 inhabitants showed marginalization (INEGI, 2011). Also, a high percentage lacked of services to some extent, including availability of drinking water at home. The difficulty to supply water in sufficient quantity and quality to inhabitants of Mexico City is very large and the process very expensive, for which its inhabitants must be extremely careful in handling and conservation of water available, as scarcity of the resource can condition development and cause serious conflicts among users (CONAGUA, 2000). In 2010 to provide a cubic meter of water to Mexico City cost about 7 pesos (US $0.53), but the people from capital paid an average of$ 2 m3 (US $0.15 m3). Water scarcity is one of the problems in natural resources that threaten humanity. The center of Mexico is the region with less water, with an annual average availability per capita of 190 m3, while in the southern border count with 25 843 m3 per capita. So the problem is obviously more critical in the central states, which justify this study in the Iztapalapa delegation, being an overpopulated area. Iztapalapa is the most Eastern delegation from Mexico City, which complicates the provision of drinking water for the area, since one of the main supplies of water for the city (the Cutzamala System) enters from the north. The water offer consists of underground water supplies found around Sierra Santa Catarina; however, these are not enough to meet the demand for water in the delegation, which is complemented considering that stated above with water obtained from the Cutzamala system, but still not enough to meet demand. During the dry season, water scarcity increases, especially in the highlands of San Lorenzo, Paraje San Juan and Santa Catarina which are the most marginalized areas from the delegation. This research deals with water for urban use, which is a trend topic because the problems in quality and quantity of available water is increasingly acute in central and northern Mexico and particularly in the delegation Iztapalapa from DF. The overall objective was to estimate the economic value of drinking water in the Iztapalapa delegation, by the contingent valuation method (CVM). For which the following specific objectives were raised, estimate willingness to pay (DAP) to improve the quality of water service for urban use, taking into account socioeconomic variables (age, education, marital status, sex, income and shortages) and determine the perception of the current drinking water quality and desired quality. The general assumption that economic valuation of drinking water is a function of education, age, income, marital status, sex and water shortages arose. Furthermore, the perception of the quality of drinking water is bad and that the shortage affects a lot of users. In their reserach on willingness to pay for improvements in the quality of drinking water Jordan and Elnagheeb (1993) in Georgia, United States of America, using the contingent valuation method, estimated an average of DAP of$ 5.49 dollars monthly, over the rate that were already paying, and those with access to private wells up to $7.38 dollars. However, Polyzou et al. (2011) found that, for different reasons, not always the users of drinking water service are willing to pay for an upgrade as they found that only 40% of respondents were willing to contribute some amount to improve the quality of drinking water. Harner (1996) in his research on the value of drinking water in partially monetized rural economies found that users of drinking water through the forms of cooperation in them is present, are willing to provide working days to get improvements in such service. Materials and methods The methodology consisted of applying the contingent valuation method (CVM), which begins with the design and implementation of a questionnaire to users whose sample size was determined by applying sampling techniques. To obtain honest responses in the survey it parts from a credible situation on the conditions under which the natural resource water in Iztapalapa are, although this is hypothetical. The survey was designed so that interviewers can identify the main variables that influence the decision of respondents, avoiding bias and facilitating data recording to enable subsequent econometric modeling. As it was worked with a hypothetical situation and subjective responses, should be taken into account certain rules and elements from the survey to ensure a good design of it. For this, the survey was prepared according to the general guidelines given by Mitchell and Carson (1989), but the emphasis is on the survey items listed below (Duffield and Patterson, 1991; Cooper, 1993). Formats for DAP question. The second set of questions are the most important and to which more attention is paid during the design process. The sub-elements of this block are: 1) the hypothetical market; 2) payment vehicle; and 3) the question about DAP (Barzev, 2004). In the designed questionnaire the question is elaborated according to that stated above and each respondent is questioned with different monetary amounts, chosen at random and in each print of the questionnaire mark the rectangle (cell) containing the amount at random; however, only considered amounts in the payment card (Monroy, 2011). Sampling and sample size. The statistical method used to determine the sample size in the Iztapalapa delegation was simple random sampling (SRS), which is a selection method of n units in a set of N so that each NCn sample have the same chance of being selected. In practice, a simple random sampling is performed unit per unit (Cochran, 1984). Sample size: the target population were users older tahn 18 years who may be aware of water use. Each questionnaire was assigned a random number of monetary amount to be asked so the the interviewer could not introduce bias when performing the interview with users of drinking water. The delegation has 1.8 million inhabitants according to the Population Census and Housing from 2xxx. The sample size was 95 inhabitants. Modeling: the linear model was applied for this research, which is used in the nLogit / Limdep program. The general logistics model is presented below: P(SI)= α0 + β1X1 + β2X2 + β3X3 + β4X4 + β5X5 + β6X6 + β7X7 +β8X8 + β9X9 +εe Where: P (SI)= is the probability of a positive response from DAP; X= is the set monetary amount; X2= age; X3= education; X4= marital status; X5= gender; X6= family size; X7= family income; X8= perceived quality; X9= perceived scarcity of water and error. Results and discussion Socioeconomic characteristics The lack of education, income and opportunities makes people not to give a real value to water, which many of them believe that the authorities are solely responsible for water problems that the delegation has. The water problem in Iztapalapa delegation is very serious, there are places that do not cout with the necessary piping to supply water to users or the existing pipeline is badly damaged, it is worth knowing that "from March 16, 2007 to May 31, 2008, 438 tanker trucks were supplied daily on average in the delegation. (Dirección General de Servicios Urbanos, 2009) "as an attempt to decrease daily deficiencies from the drinking water system. Regarding variable age of respondents, the average age was 43 years. The oldest was 83 and the youngest 23, this because within the sampled families sought to interview people who had knowledge of the payment and use of water in the delegation. Regarding the level of education from respondents, the highest schooling is for people who have college and minimum for people who have no schooling or have zero schooling, the highest ranking was for high school, with 48%, followed by junior high with 23%, then elementary with 18% and college 10%, it should be noted that 1% of respondents said not having studies. 77% of respondents said married, therefore, being heads of the house there are elements to say that they knew perfectly that related to payment of water in the delegation, 6% of respondents are widowed, 8% divorced and 9% are single. Within the question of income to the inhabitants from Iztapalapa were asked by certain ranges, the highest level of income was more than$ 15 000.00 and the lowest was less than $3 000.00, the range where more inhabitants are is between$ 3 001 and $6 000 with 56%, the next in importance is between$ 6 001 and $9 000 with 24% and finally ranges between 0 -$ 3 000 and $9 001 -$ 12 000 with 9%.

Water characteristics perceived by users: characteristics of interest perceived by users. The response of users from the Iztapalapa delegation interviewed in the sample was that they are more interested in the quality and supply of water 32%, then there is the quality, quantity and supply of water 28%, so it is clear that the users are interested in having water most days of the week because many of them do not count with a cistern to store water, then follows quantity and quality with 17% and 15% quality. Perception of water quality by users. Users interviewed in the delegation have a perception of high water pollution with 42%; 38% have a perception of moderate pollution and 12% say that pollution is very high and only 8% said that water pollution in the delegation is low or zero.

Perception of water scarcity by users. 42% of users from the delegation perceive that the shortage of water is regular, 39% say that it is high and 12% say that it is very high, only 7% says that water scarcity is low or nule. Perception of payment from the users. The average payment of interviewed was $176 every two months, having$ 20 as the lowest payment and $1,500 as the highest, of all respondents 51% say that the charge of water they receive is appropriate or are satisfied, 42% say that the payment is high and only 4% of respondents said the charge is low (Table 1). Table 1. Results from statistical analysis.  Parámetro Valor Logaritmo de la función de verosimilitud -47.13700 Logaritmo de la verosimilitud restringida -61.06079 McFadden pseudo R-cuadrada .2280316 Chi cuadrada 27.84758 Grados de libertad 9 Probabilidad [Chi-cuadrada > value] 0.1011433E-02 Statistical model Statistic analysis Fit test: pseudo R2 fit takes into account the restricted and unrestricted likelihood functions as shown: Pseudo R2=1-LnLLnLr Where: LnL= natural logarithm of likelihood; LnLr= natural logarithm of restricted likelihood. Substituting in the above equation is: Pseudo R2=1-47.1370061.06079=.228 Therefore, it is concluded that the model has a good level of adjustment as authors like Bateman (2002) cited by Valdivia et al. (2009) mention that a R2 equal or greater than 0.1 is taken as acceptable (Table 2). Table 2. Results from nlogit/Limdep program for individual tests. Variable Coeficiente Error estándar (St. Err). Probabilidad (Y= 1) b/St.Err P(|Z|>z) Media de X Constante -0.53149976 2.29403721 -0.232 0.8168 Precio -0.05323517 0.01414059 -3.765 0.0002 40.2473118 Edad 0.03407113 0.02661513 1.280 0.2005 43.4946237 Esc 0.48480066 0.35532185 1.364 0.1724 3.48387097 Estc 0.35515139 0.70461596 0.504 0.6142 0.76344086 Sexo 0.74404594 0.56635420 1.314 0.1889 0.63440860 Tm -0.05960353 0.26566871 -0.224 0.8225 2.68817204 Ing -0.08792045 0.32934340 -0.267 0.7895 2.35483871 Cap 28.0374579 0.119372D+07 0 1 0.97849462 Eap -28.2142471 0.119372D+07 0 1 0.94623656 Dependency test. Within the statistical analysis also seeks to obtain the dependency test for which the restricted and unrestricted likelihood are also used as follows: LR= -2[LnLr - LnL] Substituting values: LR= -2(-61.061 - 47.137) Thus obtaining the following dependence test for our model: LR= 27.848 Relevance test For evaluation with individual tests the variable that was significant in statistical terms was price, which had a value of 0.0002, the next in importance is education with 0.1724 even thought is no longer significant in statistical terms at a level of 95% reliability, the same goes for the third and fourth variable of importance, sex and age respectively, that even with 95% reliability still not representative in the model, unless the reliability of the model is reduced. The model has a prediction percentage of 77 419%, which can be taken as correct for being an economic model applied to the environment. Willingness to pay or compensatory variation. To obtain DAP only the most significant variables found in the model were used, which were price, age, education and sex and marital status, family size, income, perceived quality of water and perceived scarcity of water were excluded. DAP average obtained in this work was$ 62.63 additional to bi-monthly payment obtaining a minimum DAP of $44.74 and a maximum of$ 84.73, considering a number of 441 000 334 households with potable water worth approximately $165.85 million a year for the payment of water. Conclusions The economic value of water was estimated by the contingent valuation method, obtaining an average willingness to pay (DAP) for the inhabitants from the delegation of$ 62.63. 62% of people would be willing top ay an extra amount for quality, quantity and perceived supply of wáter to be improved, 38% of people would not be willing to pay some extra amount due to the current payment or because do not believe in the authorities.

The 93% of respondents said that water from the delegation has some degree of contamination from moderate to very high, which is why mentioned that it was urgent to make service improvements. Regarding to economic analysis, of estimated coefficients from the logit model there is that at a higher price that was assigned to the valuation of water, the probability of getting a positive response from the respondent is lower. The lineal model estimated in nlogit/limdep program showed that only the price variable is significant in statistical terms in the model to the desired reliability, and the others close to be significant are education, sex and age.

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Received: July 2016; Accepted: September 2016

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