Impact of Piped Water on Household Welfare
Attributes
Medium: Water
Country: Vietnam
Analytical Framework(s): Other
Study Date: 2009
Publication Date: 2013
Major Result(s)
Study Note: The authors acknowledge that one difficulty in measuring the effect of piped water on household welfare is endogeneity of the piped water. However, they said that the difference- in-differences with matching estimator can solve the endogeneity bias provided that this bias is caused by time-invariant unobserved variables. They further noted that randomization design and instrumental variables were two ideal methods in dealing with endogeneity, but randomization design of piped water is difficult to implement in reality. They said that finding a good instrument for piped water is also challenging, since using a weak or invalid instrument can lead to a large estimation bias.
Study Details
Summary: This study aimed to measure the effect of piped water on household welfare indicators including income, working effort, and sickness. The effect of piped water on household income and labor supply was positive but not statistically significant. Also, the effect of piped water on sickness of household members was negligible and not statistically significant. However, the results do not mean that piped water is unimportant. Households still care greatly about the aesthetic and life-style benefits of piped water, and they tend to prefer piped water than water from other sources.
Site Characteristics: The authors noted that Vietnam is an interesting case study for the effect of piped water for the following reasons: first, the country has a low proportion of people with access to improved water - around 26 percent of the population and only 4.3 percent of the poor had access to piped water. Around 80 percent of cases of infectious diseases are related with unclean water. Nearly one million diarrheal cases are reported ever year; second, during the time the study was conducted, there were still no quantitative and evidence-based studies that measure the effect of clean water on the household welfare in Vietnam. They claimed that many studies on the quality of drinking water in Vietnam focused on the chemical aspects of water, adding that other studies mentioned the adverse effects of unclean water on health but without giving any quantitative evidences; third, they cited the Vietnam Household Living Standard Surveys (VHLSS) for 2002, 2004, and 2006, which they believe allow the estimation of the effect of piped water on outcomes beyond water-related diseases using the difference-in-differences with matching estimator.
Comments: The authors recommended that a better impact evaluation design to give more informative results. They noted that when measuring the effect of water quality on household welfare, one should use a continuous indicator of water quality such as pollution or arsenic measures, which allows for more variation in water quality. Direct outcomes of piped water such as waterborne diseases should also be used to detect the effect of piped water on health. They added that impact estimation would be more accurate if a randomization design or instrumental- variables regressions with valid instruments are used.