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The Economic Costs and Benefits of Investments in Municipal Water and Sanitation Infrastructure: A Global Perspective

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  • Whittington, Dale
  • Hanemann, W. Michael

Abstract

This paper presents illustrative estimates of the costs and benefits of investments in municipal water and sanitation systems in developing countries. Four sources of information on the economic benefits households receive from improved municipal water and sanitation services are reviewed: (1) prices charged for vended water, (2) avertive expenditures, (3) avoided costs of illness, and (4) stated preference studies. There is little evidence to suggest that the current monthly benefits of improved water and sanitation services exceed the monthly costs. The most important limitation of such comparisons of annual costs and benefits is that benefits per household may well grow over the life of the investments, but this possibility does not ensure that such projects will pass a cost-benefit test.

Suggested Citation

  • Whittington, Dale & Hanemann, W. Michael, 2006. "The Economic Costs and Benefits of Investments in Municipal Water and Sanitation Infrastructure: A Global Perspective," CUDARE Working Papers 7159, University of California, Berkeley, Department of Agricultural and Resource Economics.
    • Handle: RePEc:ags:ucbecw:7159
    DOI: 10.22004/ag.econ.7159
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    References listed on IDEAS

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    2. Jalan, Jyotsna & Ravallion, Martin, 2003. "Does piped water reduce diarrhea for children in rural India?," Journal of Econometrics, Elsevier, vol. 112(1), pages 153-173, January.
    3. Davis, Jennifer & Kang, Alice & Vincent, Jeffrey & Whittington, Dale, 2001. "How Important is Improved Water Infrastructure to Microenterprises? Evidence from Uganda," World Development, Elsevier, vol. 29(10), pages 1753-1767, October.
    4. Kristin Komives & Vivien Foster & Jonathan Halpern & Quentin Wodon, 2005. "Water, Electricity, and the Poor : Who Benefits from Utility Subsidies?," World Bank Publications - Books, The World Bank Group, number 6361.
    5. Dale Whittington & Donald T. Lauria & Vimalanand Prabhu & Joe Cook, 2004. "An economic reappraisal of the Melamchi water supply project - Kathmandu, Nepal," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 3(2), pages 157-178, September.
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    8. KyeongAe Choe & Dale Whittington & Donald T. Lauria, 1996. "The Economic Benefits of Surface Water Quality Improvements in Developing Countries: A Case Study of Davao, Philippines," Land Economics, University of Wisconsin Press, vol. 72(4), pages 519-537.
    9. Clifford S. Russell & William J. Vaughan & Christopher D. Clark & Diego J. Rodríguez & Arthur H. Darling, 2001. "Investing in Water Quality: Measuring Benefits, Costs and Risks," IDB Publications (Books), Inter-American Development Bank, number 22398, February.
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    Cited by:

    1. Bruno Lanz & Allan Provins, 2014. "The demand for tap water quality: Survey evidence on water hardness and aesthetic quality," CIES Research Paper series 23-2014, Centre for International Environmental Studies, The Graduate Institute.
    2. Céline Nauges & Dale Whittington, 2010. "Estimation of Water Demand in Developing Countries: An Overview," The World Bank Research Observer, World Bank, vol. 25(2), pages 263-294, August.
    3. Perard, Edouard, 2018. "Economic and financial aspects of the sanitation challenge: A practitioner approach," Utilities Policy, Elsevier, vol. 52(C), pages 22-26.

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