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Globalization, the liberalization of international markets and intensification of international cooperation pushed the widespread expansion of privatization of public services. Whether privatization has served the public interest remains unclear. This paper presents the case of Armenia, a country in transition that has undergone an intensive privatization process in the water sector. Top-down
assessments show that Armenian utilities reached above-average rankings in international comparisons. Household surveys were used to provide empirical evidence on the real experiences of households through measuring the households’ perception on water services, the willingness to pay and conservation actions. The results shows that households, overall, are satisfied with water services. The highest share of those who are willing to pay for improvements is in rural areas reflecting a greater need for better water services. As expected, the households’ financial situations and the perception of the price of water affect the willingness to pay. The results of the research gave proof to the social comparison theory according to which a lower level of public satisfaction with water services can be derived in areas that neighbor other areas with better water supply services. The study also finds that universal water metering impacted household water consumption behavior.
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