Economic benefits available from the provision of improved potable water supplies : a review and assessment of the existing evidence

This report reviews the available empirical evidence on the economic benefits of water supply projects. Chapter 2 presents an overview of the research design issues involved in investigating the consequences of a water supply intervention. Chapter 3 provides an overview of what economists mean by the term economic benefits and the units in which the benefits are measured. Chapter 4 reviews several of the better evaluations of water projects to see what can be learned from them. Chapter 5 examines the available evidence on the cost savings that individuals obtain from improved water systems (in terms of calories expended, time saved by no long having to fetch water from distant source, and monetary savings from not purchasing water from vendors). Chapter 6 reviews three types of empirical studies for estimating economic benefits that are based on individuals" actual behavior: (1) traditional water demand models; (2) hedonic property value models; and (3) random utility models. Chapter 7 turns to the available evidence on economic benefits obtained from contingent valuation studies (i.e., individuals" responses to hypothetical questions). Finally, Chapter 8 summarizes the major findings and conclusions and offers suggestions for future research. The appendix summarizes selected studies designed to estimate the consequences of other types of infrastructure investments. (Author abstract)