This paper published in the Bulletin of the World Health Organisation presents the findings of a valuation study that estimated the economic value of the average “treatment effect” of a community demand driven water and sanitation programme. The study employed a unique combination of propensity-score “pre-matching” and large panel data to estimate the economic impacts of a multi-dimensional environmental health programme.
The paper informs that a number of epidemiological studies on the benefits of water and sanitation interventions have shown that diarrhoea can be reduced by 30–50%. However, these studies have not estimated the economic benefits of improving water and sanitation, despite the fact that such estimates are needed to properly allocate investments among different health interventions, different programmes that promote health or non- health water uses, and different sectors of the economy. Also many of these studies do not meet quality standards.
Extensive literature exists on the appropriate theoretical model for evaluating the impact of environmental interventions on economic welfare. However, there are no causal empirical studies that measure the economic benefits generated by water and sanitation policies. Keeping this background in mind, this study aimed at estimating the economic impact of a community demand-driven programme launched by the government of the state of Maharashtra, India, with support from The World Bank to improve water, sanitation and hygiene in rural areas of the state.
The study found 13% more private tap use and 7% more private toilets in programme villages compared to control villages. However, there was no statistically significant impact found on handwashing or home water treatment. The study findings are important because the study demonstrated methods that made it possible to attribute the benefits achieved to environmental programmes and policies in the sector using a real world case study.
The study found that the average household in programme communities could save an average of US$ 6.98 per month, or roughly 5% of monthly cash expenditures and the benefits were higher in poorer and socially marginalised house holds, in line with the social targeting objectives of the programme. These coping cost reductions were largely due to improved access to better water and sanitation services, which shortened the time household members spent travelling to and waiting at the service source.The study also found that improved access led to greater use of better services and to better public health outcomes as long as households also adopted complementary hygienic practices, such as handwashing, in response to effective hygiene promotion.
A copy of the paper can be accessed from this link