This study estimated monetary value of water quality improvement from 3rd class to 1st class in the Paldang reservoir using the contingent valuation method (CVM) to measure individuals' willingness to pay (WTP) of questionnaire respondents for improving the water quality of the Paldang reservoir and analyzed what factors influence their WTPs. This study also measured compliance costs of proposed regulations to the polluting sources. The estimated individual WTP was used to calculate the total WTP of the community affected, and then it was compared with the compliance costs of proposed regulations to the polluting sources.