Diarrheal diseases kill two million children every year despite the availability of effective and inexpensive technologies to improve water quality and limit the spread of pathogens. There is a growing literature on the effectiveness of such technologies but important gaps remain in understanding the demand for these products and the adoption decision.
This paper provides the first systematic review of experimental evidence on willingness to pay for cleaner water in less developed countries. The authors'focus on studies in which prices are cost-randomized and demand is based on real purchase decisions. They'compare these results with evidence from high quality randomized and quasi-randomized diarrhoea efficacy trials using non-experimental methods to infer willingness to pay.'
This review expands upon and complements several existing summary articles by focusing on willingness to pay for cleaner water. Willingness to pay can be measured by price randomizations that induce people to reveal their valuation in real purchase decisions or by other methods such as contingent valuation exercises in hypothetical situations and discrete choice analysis. The review conducts a systematic search for experimental evidence on willingness to pay for cleaner water.
Headline Findings: a summary statement
The evidence shows that many people are not willing to pay for safe drinking water - having to'pay even a small fee puts people off using the water treatment technologies. It is possible to to increase the uptake of these technologies with subsidies but they have to be very large. Households'may not be willing to pay because they both underestimate the benefits of treated water and do not like the small changes in taste, appearance, or temperature from the treatment. Whilst social marketing and information campaigns may overcome some of these barriers, cheaper and more innovative technologies'and distribution models are more likely to encourage people to change their behaviour and start using these water treatment methods.
The review includes five experimental studies and eight studies that use'non-experimental methods to calculate willingness to pay. This includes'evidence from Kenya, Zambia, Ghana, Morocco, Bangladehs, India, Bolivia, Guatemala, and Uzbekistan.
Implications for policy and practice
Given the evidence of low valuation for water quality, despite the impact of water-borne disease on child health, the challenge for research and policy is to identify innovative service delivery models and technological innovations that drive prices down and make public subsidies more feasible.
Implications for further research
Future willingness to pay studies should be based on real purchases and use. Experimental methods to collect estimates of willingness to pay are easily justified as promotional discounts and could be implemented via coupon programs that make it possible to assemble large datasets quickly and cheaply.