School of Economics

Estimating the demand for municipal water and sanitation services in Kenya

Jane Kabubo-Mariara 

David Fuente

Peter Kimuyu

Dale Whittington

This project will use panel data from all water utilities in Kenya and micro-level panel data from Nairobi to add to the literature on the estimation of demand for piped water and sanitation services in developing countries. In particular, the first component of the project will examine the extent to which customers of Nairobi City Water and Sewer Company respond to average or marginal prices. The second component of the study will seek to estimate the price and income elasticities of demand for municipal water and sanitation services in Nairobi and across Kenya more broadly.  This project seeks to provide policy makers information on how customers respond to changes in price, income, and climatic factors. This information can: 1) better ensure utilities’ tariff achieve desired outcomes, 2) improve utilities’ ability to forecast demand, and 3) enhance utilities’ financial planning. This will be increasingly important in the face of climate change and as utilities in Kenya move towards full cost recovery pricing.