Factors associated with nonpayment behavior in the water sector of Nicaragua

Nonpayment behavior by consumers may jeopardize the financial sustainability of water utilities. Yet, little is known about factors underlying nonpayment behavior. This paper identifies determinants of nonpayment in Nicaragua using negative binomial regression models that account for overdispersion in the number of outstanding payments of water bills. We found that the average household had 37 outstanding monthly payments. Nonpayment was found to be inversely associated with consumer satisfaction with the current quality of water service and household income. However, nonpayment was found to be disassociated from the perceived consequentiality of not paying water bills on time. Policy implications are discussed.