Does Clean Water Make You Dirty? Water Supply and Sanitation in the PhilippinesJournal of Human Resources (2012)Dan Bennett, Harris School of Public Policy Studies at University of Chicago

Presented by: Jeff van Geete

“Do behavioral responses undercut the expected health benefits of clean water provision?”

Research Question

Consider a simple health production model:yi = ai + B1X + B2Y + ci

If univariate regression on either X or Y results in a positive coefficient, why would one of the above coefficients be negative?

Answer:

Clean water and sanitation may be substitutes if clean water enables the recipient to endure a dirtier environment without sacrificing health. Households also may face a budgetary tradeoff between sanitation and water.

Although the degree of substitutability between these inputs may vary by setting, clean water and sanitation are negatively correlated in the present context of Cebu.

Previous

Literature

Clean water seems beneficial in some contexts but ineffective or even harmful in others (Fewtrell et al. 2005) Kremer and Miguel (2004, 2007) find positive externalities for school attendance and social learning about the benefits of a deworming program.

Kremer et al. (2007) find a marginally significant health impact of spring protection in rural Kenya.

Lipscomb and Mobarak (2008) examine the impact of political decentralization on pollution spillovers in Brazil (shirking).

Lakdawalla, Sood, and Goldman (2006) argue that antiretroviral drugs encourage risky sexual behavior (shirking).

Motivations &

Limitations

“In an effort to internalize the externality, the community may invoke social norms or other strategic mechanisms that lead to a sanitation complementarity (Ostrom 2000; Bandiera, Barankay, and Rasul 2005; Banerjee, Iyer, and Somanathan 2006).”

Bennett draws much of his motivation from Peltzman’s shirkers (1975) and Akerlof’s social norms (1980)

Causal mechanism relies on strategic interactions

Like Fisman and Miguel’s (2007) “Norms” paper, only parking fines are replaced by the costs of keeping clean in a dirty environment.

Setting

Metro Cebu Water District (MCWD) delivers chlorinated piped water to ~40 % of area households

110 high volume deep wells, which are located inland from the city, stores water in several area reservoirs

$86 for installation, $2.70 per month for a half-inch connection, and $0.30 ( vs. $0.65 in Denver) per cubic meter of water.

This fee schedule subsidizes poor households - “community well”

A household is defined as having piped water if the MCWD is its “usual main source of drinking water”

Cebu lacks a centralized sewer system (500T of public defecation)

DataN = 3,000HH, 22 yrsSource: CLHNS

Why not just compare means? Water prevalence may be endogenous to sanitation

Cebu Longitudinal Health and Nutrition Survey (CLHNS): Panel survey of ~3,000 households over 22 years; includes

all households that experienced a birth from June 1983-May 1984 in 33 randomly selected barangays (out of 79 in Cebu, ~42k total).

74 percent barangays that are designated as “urban.” Surveyors conducted 12 bimonthly interviews with each

household from 1983 to 1985, and followed up five additional times from 1991 to 2005

As a panel survey, the CLHNS captures a sample that is relatively young in early rounds and old in late rounds.

fertility-selected sampling methodology (children CLHNS lacks reliable measures of income or monetary wealth Data on diarrhea only from the 12 bimonthly surveys, 1983–85

Collapsed into a 12-period count variable for “anyone” in the HH having diarrhea in the last week.

How does Bennett help us answer the research question?

i substitutes water and

sanitation…

…but different i’s have complementary sanitation

An individual’s health-maximization problem…

…defines his/her ‘best response’ functions:

Through the implicitfunction theorem, the first order condition for sanitation yields the partial effect ofclean water on sanitation:

Which lets us sign the effects of interest:

Comparative static models give predictions

}Driving mechanism

Health Responses Endogeneity of piped water

}Robustness Check

(Soil Thickness)

Table 1: Different on Observables

si = {0,1}measured by surveyors from MCWD

Piped water prevalence at years of survey

Negative correlation between piped water and sanitation

Positive correlation between piped water and self-reported diarrhea…

…probably a good thing!*

(* Unless substitution manifests as shirking!)

Table 2:

_6% worse sanitation response from a movement of 1 SD (0.34) in wi

Table 3

sd(w) = 0.27

…but 8% more diarrhea associated with community clean water usage. Consistent with s

complementarity

9% less diarrhea associated with household clean water usage… sd(w) = 0.51 (?)

_

Making a “super instrument”Piped water and sanitation would be endogenous if dirtier places consume more water

From Eq 11 (Table 2)…

Cov(wi,ei) ≠ O

recover variation using topological characteristics correlated with access to piped water, uncorrelated with s (ER)

Table 4:

First-stage:

w = ai+zi+ei

Second-stage:

si = ai+ B1w+B2X+ei

_

^

Table 6: Soil Thickness (a robustness check)

28% more diarrhea for thickest soil sd(T) = 0.53 (?)

10-13% lower sanitation at thickest soil

Take-away / Conclusion

To our understanding of sanitation’s complementary effects, Bennett adds those substitutive effects at the household level which may constrain our expected returns from investment in developing nations.

Akerlof (1980) describes how a social norm may induce a large strategic complementarity. Compliance with a social norm strengthens the norm, which encourages greater compliance.

One explanation for Bennet’s findings is that clean water has interfered with a social norm of sanitation. For some, the sanitation benefits of shirking outweigh those from adherence to norms.

Clean water recipients were cleaner without clean water

Bonus: Table 5 - PlaceboEducation, like health, is an investment in human capital preferences and SES are determinants of both

Does education respond to clean water?

No (we don’t want it to)