**3. Results**

266 Current Issues of Water Management

No. of Questionnaire Scenario

The study takes industrial and science parks having a higher water consumption as survey objects, including factories in Hsinchu Industrial Park, Chungli Industrial Park, Taichung Industrial Park, Linyuan Industrial Park, Hsinchu Science Park, Central Taiwan Science Park and Tainan Technology Industrial Park. The above industrial and science parks comprise the sampling zone of the study. For industrial parks, factories having a water consumption exceeding 200CMD are selected as survey objects, a total of 347 factories are included. Then, we call factories one by one to verify their water consumption and exclude those having a low water demand or those lacking willingness to participate our survey. After verification, a total of 205 factories are included in the survey. The survey schedule

> Selected as survey objects

Hsinchu Industrial Park 20 12 5 Chungli Industrial Park 13 8 2 Taichung Industrial Park 1 1 0 Tainan Technology Industrial Park 6 3 2 Linyuan Industrial Park 8 4 4 Hsinchu Science Park 245 145 26 Central Taiwan Science Park 54 32 8

Return Ratio 22.93%

Total 347 205 47

Send after verify their water consumption and exclude those having a low water demand or those lacking willingness to participate our survey

Return

Table 1. The price "T" we suggested on the questionnaire (in NT\$/ton)

Count

Table 2. Statistics on questionnaire count of sampling zone factories

**2.3 Sampling design** 

Areas

covers September and October of 2009.

**A** 3 **B** 5 **C** 7 **D** 9 **E** 11 **F** 12 **G** 13 **H** 15 **I** 16 **J** 18 **K** 20 **L** 24

> For empirical analysis of factories' Willingness to Pay (WTP), the study employs the valuation method developed by Cameron & James (1987) and Cameron (1988) using the software called LIMDEP. In order to avoid influences from extreme sample values, Logit Model is used to establish the valuation formula of WTP (Willingness to Pay); Approximation of Newton's method and maximum likelihood estimation (MLE) are used to evaluate the WTP; accuracy of the prediction exceeds 75% although the number of sample is small. Table 4 shows results of WTP:


Note: The estimation models are under the 0.5% significant level

Table 4. Results of WTP of factories

Under the assumption that "the government guarantees that quality of reclaimed water conforms with city water specifications, no interruption of supply 365 days a year with assured quality and loss indemnification on supply interruption," and that "dedicated pipeline to be installed for reclaimed water delivery, plus with free-of-charge pipe connection," and that "50% deduction on wastewater treatment charge if total consumption of reclaimed water exceeds 40% of total industrial water consumption of the company", factories are willing to purchase the reclaimed water at an average price of 0.48\$/ton (13.97NT/ ton), reclaimed water demand is 131,000 Cubic Meter per Day (CMD2), 22.8% of factories in the sampling zone are willing to use reclaimed water, and a ratio of 47% of the

<sup>2</sup> Cubic Meter per Day (CMD) is the flow rate of water

The Willingness to Pay of Industrial Water Users for Reclaimed Water in Taiwan 269

factories are willing to purchase the reclaimed water at an average price of 0.48\$/ton. The Scenario mach the policy that Taiwan government wants to promote to use of reclaimed water for new water source other than diversion from river, reservoir water, building new

 The study results show the WTP under the Scenario exceed the existing price of city water indicate that the assumption of senior as about are the works if which need to be done in the future. We presume the reason behind this are that: 1) the factories that are willing to assist the survey had suffered from water shortage in the past operation and therefore are willing to procure the reclaimed water at a cost higher than the city water under the assumed scenario. 2) It appear to be under the changing climate, the Industrial water users are more concern about the stable water source. 3) We speculated that the Scenario of "50% deduction

The result of this study implies that the appropriate water management policy design could really encourage the use of reclaimed water. In other word, appropriate water management policy design could change the structure of water use. Well water management policy or incentives mechanism, such of deduction on wastewater treatment charge, could bring about good water conservation patterns. Furthermore, the willing to pay for the reclaimed water price is higher than the city water also show that the wastewater reclamation industry have good future prospects. If there has appropriate water management policy, the reclaimed water could be good water source other than diversion from river, reservoir

The article was extracted from detailed project "The Research on the Strategic Development of Specialists Training of the Wastewater Reclamation and Reuse Industry" that sponsored by the Water Resources Agency, Ministry of Economic Affairs, Taiwan (project code: Moeawra0980052) and "A game theory approach to evaluation the irrigation water transfer" that sponsored by the National Science Council, Taiwan (project code: 100-2221-E-134-001). The authors would like to thank the anonymous reviewers and all the participants of this

Asano, T., Burton, F., Leverenz, H., Tsuchihashi, R. and Tchobanoglous, G. (2007). "Water Reuse: Issues, Technology and Applications", McGraw Hill, New York, 1570pp. Cameron , T. A. and M. D. James, 1987. "Estimating Willingness to Pay from Survey Data:

Cameron, T. A., 1988. "A New Paradigm for Valuing Non-market Goods Using Referendum

Choon Nam et al. (2002). "Singapore Water Reclamation Study- Expert Panel Review and

of Environmental Economics and Management, 15:355-79.

http://www.pub.gov.sg/NEWater\_files/download/view.pdf

An Alternative Pre-Test-Market Evaluation Procedure." Journal of Marketing

Data: Maximum Likelihood Estimation by Censored Logistic Regression." Journal

on wastewater treatment charge" have a great incentives to use reclaimed water.

water, building new reservoir or groundwater extraction.

reservoir or groundwater extraction.

**5. Lessons learned** 

**6. Acknowledgments** 

project for their efforts.

Research. ,24:389-95.

Findings", June 2002.

**7. References** 


returned effective samples. Average consumption of reclaimed water per factory is 291.55CMD, 48.86% to the total consumption of industrial water. Table 5 shows statistics of potential usage and consumption of reclaimed water by factories.

Note: Average potential maximum consumption of reclaimed water per factory = Total potential consumption of reclaimed water / number of factories that are willing to accept

Table 5. Statistics of potential reclaimed water application and consumption by factories

Table 6 shows values of model parameters of the Scenario. In which MAA indicates surveyed "T" price (N.T.D./ton); MAW indicates the product of ratio of maximum reclaimed water to total industrial water acceptable to the factory multiplied by the total consumption of industrial water in 2008(CMD); MAN indicates the amount of washing water the factory is willing to use(CMD). If the MAA coefficient is negative and MAW and MAN coefficients are positive, the theoretical expectation is deemed met.


Table 6. Value of model parameters of Scenario
