Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)


An Estimate of the Economic Value of Domestic Water Services: Case Study in Jordan

Author(s): Mohammad A. Tabieh, Emad K. Al-Karablieh, Amer Z. Salman, Amani Al - Assaf, Mohammad E. Majdalawi, Tala H. Qtaishat

 In relation to the real cost of supplies, most households get domestic water at a reasonable cost. This condition, along with a minor increase in operation and service performance, resulted in a significant shortfall in infrastructure investment to maintain and extend the water system. The goal of this study is to assess the value of home water as a tool for determining the appropriate water tariff and identifying the true economic worth of domestic water. Water's value to users is a fundamental component of extrinsic values that may be quantified using the willingness to pay technique and stated as the cost of water to users. The availability of data is an important consideration for deciding the best method for valuing water. This factor prompted the use of the opportunity cost method. The total cost of water delivery and the opportunity costs are the two most important aspects of this strategy. The findings suggest that the average domestic water value per cubic meter is 1.85 JD, and total domestic water in Jordan is projected to be JD 338 million, with spatial differences across governorates, while it is greatest in Jordan's distant locations with a value of about 2.35 JD/m3. The higher numbers are attributed to the high cost of providing water supply in certain locations owing to inefficient operations. Improving utility performance by minimizing non-revenue water will lower water service costs and, as a result, the value of residential water. Water price is a touchy political subject. Simultaneously, when water prices fall short of covering the expenses of delivering and maintaining services, major issues develop. In this case, the water utility must take proper measures. To pay the expenses of metering, invoicing, illegal connections, and leakage, cost recovery needs costly and effective services. Water conservation methods should include pricing, as well as adequately implemented environmental fines.

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