American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
The Value of Clean Water: Experimental Evidence from Rural India
American Economic Review
(pp. 1148–87)
Abstract
Over 2 billion people lack clean drinking water. Existing solutions face high costs (piped water) or low demand (point-of-use chlorine). Using a 60,000 household cluster-randomized experiment, we test an alternative approach: decentralized treatment and home delivery of clean water to the rural poor. At low prices, take-up exceeds 90 percent, sustained throughout the experiment. High prices reduce take-up but are privately profitable. We experimentally recover revealed-preference measures of valuation. Willingness-to-pay is several times higher than prior indirect estimates; willingness-to-accept is larger and exceeds marginal cost. Self-reported health measures improve accordingly. On a cost-per-DALY basis, free water delivery regimes appear highly cost effective.Citation
Burlig, Fiona, Amir Jina, and Anant Sudarshan. 2026. "The Value of Clean Water: Experimental Evidence from Rural India." American Economic Review 116 (3): 1148–87. DOI: 10.1257/aer.20250278Additional Materials
JEL Classification
- I12 Health Behavior
- O12 Microeconomic Analyses of Economic Development
- O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
- O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- Q25 Renewable Resources and Conservation: Water
- Q51 Valuation of Environmental Effects
- Q53 Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling