Investigating Heterogeneous Consumer Preference for Sustainable Sewerage Asset Management: The Case of South Korea

Abstract

This study proposes a data-based strategy for prioritizing sewerage services and developing consumer-centric asset management systems. Sewerage systems are essential infrastructure, but resource-intensive, and governments have faced challenges due to limited budgets and aging facilities. Most countries are still in the early stages of adopting consumer-centric approaches. By using the mixed logit model, this study identified heterogeneous service preferences among consumers based on their priority for physical and social services. Groups who attributed their importance to physical services were more sensitive to sewerage bills; however, those who emphasized social services were more interested in water activity environment improvement and odor intensity reduction. This study also showed that people are willing to pay USD 10 for odor intensity reduction and USD 6 for water activities improvement on average, but those who prioritized sinkhole reduction and flood reduction answered less willingness to pay for each service improvement. Applying these heterogeneous service preferences to service improvement strategies can lead not only to higher consumer satisfaction and lower economic burden, but also to a deeper understanding of residents’ willingness to pay for service improvement in certain service preference areas. Therefore, the results contribute to the development of sustainable asset management strategies.