A range of alternatives are available to water companies in the UK for reducing future water supply deficits, each having different implications in terms of environmental impacts (both positive and negative), level of service provided to customers and associated costs. This paper presents the results of two choice experiment valuation studies in the south east of England, in which water supply problems are considered. Further to the specifics of the individual scenarios, these studies lead to more general observations relevant to the future evaluation of water supply options, namely: at the current level of supply reliability, there is a reluctance to pay for any improvement in reliability; where future increases in supply reliability are required, water customers are generally willing to pay more in water charges in order to prevent negative environmental impacts; and, to a lesser extent, customers are willing to pay for water supply operations that would bring about environmental improvements, although this depends on the type of improvements considered and may require greater efforts on the part of water companies to gain consumer acceptance. In order to explore the meaning and validity of these principles further, a more generic choice experiment was designed and studied using post-questionnaire focus group analysis. Although the qualitative results provide further support for these principles, they also illustrate the difficulties inherent in asking the general public to value unfamiliar goods and the challenges that this raises for future design and analysis.

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