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Water Demand and the Welfare Effects of Connection: Empirical Evidence from Cambodia

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  • Marcello Basani
  • Barry Reilly
  • Jonathan Isham

Abstract

Using cross-sectional household-level data from seven provincial Cambodian towns, we estimate a water demand equation for households connected to the network, and provide an empirical measurement of the economic value of tap water connection. The use of a two-step econometric procedure allows us to analyse issues relating to household access to water and to the volume of household water consumption. We estimate that the connection elasticity with respect to the one-off initial cost of connection is -0.39; the price elasticity of water demand for the connected households lies in a range between -0.4 and -0.5; and the welfare effects of water connection are approximately 17 percent of the actual expenditure of the poor unconnected households. Furthermore, providing a network connection to all households in the sample would have the distributional consequences of decreasing the estimated Gini coefficient by three percentage points and the poverty head-count ratio by six percentage points.

Suggested Citation

  • Marcello Basani & Barry Reilly & Jonathan Isham, 2004. "Water Demand and the Welfare Effects of Connection: Empirical Evidence from Cambodia," Middlebury College Working Paper Series 0429, Middlebury College, Department of Economics.
  • Handle: RePEc:mdl:mdlpap:0429
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    File URL: http://www.middlebury.edu/services/econ/repec/mdl/ancoec/0429.pdf
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    Cited by:

    1. Hagos, Fitsum, 2008. "Water supply and sanitation (WSS) and poverty: micro-level linkages in Ethiopia," IWMI Working Papers H041794, International Water Management Institute.
    2. NAUGES Céline & VAN DEN BERG Caroline, 2006. "Water Markets, Demand and Cost Recovery for Piped Water Supply Services: Evidence from Southwest Sri Lanka," LERNA Working Papers 06.08.201, LERNA, University of Toulouse.
    3. Olivia Jensen, 2017. "Public–private partnerships for water in Asia: a review of two decades of experience," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 33(1), pages 4-30, January.

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