This study used double-bounded dichotomous-choice to estimate and analyze the factors affecting households’ willingness to pay (WTP) for water quality improvement. This study notes that households with higher income, living near polluted water source, using tap water instead of natural water, who are handicraft producers, and who have more members are willing to pay more. However, households who rarely hear about environmental pollution issues and who are offered a higher bid are more likely to refuse to pay. Solutions to improve water quality are suggested such as to raise people's awareness through communication channels and social organizations; to increase income associated with environmental protection policies; to construct wastewater treatment plants; to encourage the relocation of production establishments to industrial parks and industrial complexes; to put regulations on collection, payment and sanctions in case of not declaring and paying fees into village conventions; to promulgate circulars, and bylaws to concretize and simplify regulations and policies of the Government, Ministry of Natural Resources and Environment.