OBJECTIVE: To evaluate and quantify the economic benefits attributable to improvements in water supply and sanitation in rural India.
METHODS: We combined propensity-score "pre-matching" and rich pre-post panel data on 9500 households in 242 villages located in four geographically different districts to estimate the economic benefits of a large-scale community demand-driven water supply programme in Maharashtra, India. We calculated coping costs and cost of illness by adding across several elements of coping and illness and then estimated causal impacts using a difference-in-difference strategy on the pre-matched sample. The pre-post design allowed us to use a difference-in-difference estimator to measure "treatment effect" by comparing treatment and control villages during both periods. We compared average household costs with respect to out-of-pocket medical expenses, patients' lost income, caregiving costs, time spent on collecting water, time spent on sanitation, and water treatment costs due to filtration, boiling, chemical use and storage.
FINDINGS: Three years after programme initiation, the number of households using piped water and private pit latrines had increased by 10% on average, but no changes in hygiene-related behaviour had occurred. The behavioural changes observed suggest that the average household in a programme community could save as much as 7 United States dollars per month (or 5% of monthly household cash expenditures) in coping costs, but would not reduce illness costs. Poorer, socially marginalized households benefited more, in alignment with programme objectives.
CONCLUSION: Given the renewed interest in water, sanitation and hygiene outcomes, evaluating the economic benefits of environmental interventions by means of causal research is important for understanding the true value of such interventions.
