Water service providers are often under pressure to improve domestic water
services, without having the expertise necessary to assess how valuable these
improvements would be to consumers. Economic analysis can play an important role in
this regard (Altaf, Jamal & Whittington, 1992). In developing countries, many master
plans of new treatment plants and distribution systems unquestionably take the
engineer-dominated supply approach while the nature of water users’ needs is
neglected. Criticisms of this approach focus on the failure of such programs which
ignore the demographic and financial realities (Whittington et al, 1993). From the mid-
1980’s, a new vision based on the demand-oriented approach has emerged. This new
approach asserts that water utility bodies need to understand actual household water use
behavior and the observed ability and willingness to pay for improved water services
(Whittington et al, 1990).