Sustainable Policy for Water Pricing in Kuwait

• Main Authors: Ali Aljamal, Mark Speece, Mohsen Bagnied
• Format: Article
• Language: English
• Published: MDPI AG 2020-04-01
• Series: Sustainability
• Subjects: willingness to pay; water pricing; subsidies; sustainability; Kuwait
• Online Access: https://www.mdpi.com/2071-1050/12/8/3257

This research investigates consumer willingness to pay (WTP) for water in Kuwait as a foundation for policy decisions on reducing water subsidies. Heavy subsidies have encouraged unsustainable very high consumption, but efforts to cut subsidies can generate strong political opposition. A survey (<i>n</i> = 443) indicates that WTP is greater at lower prices, but resistance is not purely about price. The presence of a continued partial water subsidy for basic household use slightly increases WTP, probably mainly from perceptions of fairness. Information about Kuwait’s water scarcity also has a small impact. All of these effect sizes are small, so we discuss these issues using a nudge framework from behavioral economics. A number of policies can foster small shifts in WTP; collectively they may have larger impact and make subsidy reduction relatively painless.