Readiness and Willingness of Population to Pay for Housing and Communal Services

Abstract

Housing and communal services (HCS) tariffs are growing in Russia. In 2002, the population spent 100 billion rubles more for HCS than in 2001. The purpose of this article is to evaluate real thresholds of readiness and willingness of households to pay for HCS, as well as to evaluate parameters of HCS demand price elasticities and factors determining payments collection rates. Two thresholds were evaluated: the threshold for low-income families, which is 10-14% of their personal incomes spent to pay utility bills, and the threshold of 5-6% for the whole population. These thresholds are valid for the collection rate of 95% (with other required collection rates they will be different). Both identified thresholds present very stable and solid proportions of the structure of consumer expenses and are universal for different countries.