Willingness to pay for the rural telephone service in Bangladesh and Peru

This paper measures rural households' willingness to pay (WTP) for access to public telephone services in Bangladesh and Peru through contingent valuation methods. The paper utilizes both parametric and nonparametric estimations. The main result of the paper suggests that rural telecommunications projects are welfare enhancing, since households' WTP are higher than the prevailing tariff rates. This result holds under the different parametric and non-parametric measures used and is consistent with the multiple benefits that rural households obtain with the access to a public telephone service. These central tendency measures, parametric and nonparametric, may be used in the cost benefit analysis (CBA) of the rural telephone project.