Household Characteristics, Health Benefits, and Willingness to Pay for Rural Water Supply in Pakistan

Abstract

This paper intends to analyze the impact of household characteristics over the health benefits, and consequently over the willingness to pay (WTP). WTP is an essential tool for the evaluation of the policies and the projects. Implementation of the environmental policies and the projects is highly dependant on the costs and benefits, where benefits are assessed through the WTP. The variation in the WTP values is related with the household characteristics. Previous studies suggest that income is positive but having very slight impact on the WTP. Furthermore, for water supply, proportion of adult women and children is a negative and education of household leader is a positive factor. However, household characteristics in the rural communities of the developing countries are dynamic in nature, as they haven't yet reached at saturation points. Community participation, targeting women can give them better voice and choice. Literacy rates are also going up. To assess the current trends, we conducted an extensive research in the five villages of Pakistan during July 2000. These villages have community water supply. Based on the multivariate regression analysis, we got few important results. Children, being the worst victims of water-related sickness, are the positive factor for the WTP values. Furthermore, women, who have to take care of sick children, are also the positive factor. Moreover, the health benefits are dependent on the hygienic behavior, which is related with the literacy. Hence, we tested the variable, proportion of literate persons in a household, besides the traditional variable of education of the household leader. This variable is also positive and also captures the effect of household leader's education, which is normally very low in South Asian villages. These results are useful for the policy makers, as they can prioritize the water coverage with limited available funds. The academic research can utilize these results to draw a benefit transfer function for the developing countries.