Evaluating the Benefits of a Water Quality Intervention in Rural India: A Longitudinal Study

Child diarrhea is one of the primary causes of infant death in the world. It affects poor populations in developing countries who do not have access to clean water or sanitation. Due to the limited resources that can be allocated to its solution in developing countries, new methods try to be sustainable and scalable in cost-effective ways. One such intervention funded by the Acumen Fund is a market-based, community-level water, water quality intervention in Andhra Pradesh, India. This intervention utilizes ultraviolet disinfection to provide safe drinking water at an affordable price of one Rupee for 12 liters. The objective of this longitudinal study is to quantify the economic benefits of this intervention resulting from the reductions in coping costs of diarrhea. In order do this, household averting behaviors were identified and their costs calculated using revealed preferences, specifically the averting cost and cost of illness method. This study is part of larger impact evaluation conducted by RTI International that uses a quasi-experimental research design. The data utilized in this study was gathered from 25 treatment and 25 control villages, matched using propensity score matching, over the course of a year through bi-weekly household surveys. The resulting panel data consists of 100 households observed in 26 rounds. Regression analysis using fixed effects to account for household characteristics that are time-invariant was employed to determine the effects of using clean water from the treatment plant are on averting costs. This study finds that averting costs decrease as the percentage of the household’s water that comes from the clean water source increases. For the average household purchasing clean water, monthly savings due to reductions in averting costs is about 580 Rupees, or 32% of their monthly income. Thus, providing clean water at an affordable price can help reduce household coping costs of diarrhea.