Bennett examines whether access to clean water reduces incentives for sanitation in Cebu, Philippines. Using panel data from 1983-2005, he finds:
1) A negative correlation between piped water access and sanitation levels, suggesting water and sanitation may be substitutes as clean water allows people to endure dirtier environments.
2) Increased diarrhea is associated with community access to piped water, consistent with reduced sanitation efforts. However, household access is linked to less diarrhea.
3) Instrumental variable models exploiting topological characteristics correlated with water access but not sanitation still find evidence that piped water reduces sanitation and increases diarrhea, indicating a causal relationship.
4) A robustness check
3. Consider a
simple health
production
model:
yi =ai +B1X+B2Y+ci
Ifunivariateregression
oneitherXorYresultsin
apositivecoefficient,
whywouldoneofthe
abovecoefficients 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.
4. 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).
5. 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 Peltzmans
shirkers (1975) and Akerlofs social norms (1980)
Causal mechanism relies on strategic interactions
Like Fisman and Miguels (2007) Norms paper,
only parking fines are replaced by the costs of
keeping clean in a dirty environment.
6. Setting
Metro CebuWater 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)
7. Data
N = 3,000HH, 22 yrs
Source:CLHNS
Why not just
compare means?
Water prevalence
maybe endogenousto
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 inCebu, ~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, 198385
Collapsed into a 12-period count variable for anyone in the HH
having diarrhea in the last week.
8. How does
Bennett help
us answer the
research
question?
i substitutes water
and sanitation
but different is
have complementary
sanitation
An individuals health-maximization problem
defines his/her best
response functions:
Through the implicit
function theorem, the first
order condition for
sanitation yields the
partial effect of
clean water on sanitation:
Which lets us sign the effects of
interest:
15. 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 (?)
_
19. Take-away /
Conclusion
To our understanding of sanitations 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 Bennets 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
#6: Across various specifications, sanitation is uncorrelated with piped-water usage of the household but is strongly negatively correlated with usage by the community
#9: Health is increasing and concave in clean water, wi>=0, and the sanitation of both households, si>=0 and s-i>=0. By inserting s-i into the health production function of household i, I explicitly incorporate a sanitation externality.
Because the denominator is negative (H is concave), the degree of complementarity between wi and si signs this expression.
#10: The households sanitation response to its own water supply indicates the complementarity or substitutability of clean water and sanitation. The sanitation response to the water supply of others reflects both this interaction and the degree of sanitation complementarity across neighbors. An extension of the model considers the sanitation and health impacts of soil thickness, which similarly protects the household from unsanitary conditions.
#11: Columns 1 and 2, which split the sample according to mean piped water prevalence (0.306), demonstrate that obvious confounders cannot drive the relationship between clean water and sanitation. Households in high prevalence areas have two additional years of schooling and 26 percent fewer domesticated animals. They also have fewer young children, live in more robust housing, and have greater access to toilets or latrines. These observable characteristics suggest that communities with clean water should exhibit better sanitation and health. Columns 3 and 4 illustrate a similar point by comparing the first and last survey rounds. Piped water prevalence grew by 18 percent from 1983 to 2005. Although trends in household characteristics ostensibly encouraged sanitation, this outcome fell by 8 percent over the period.