Social Cost Benefit Analysis of Water and Sanitation Improvement in a Poor Urban Slum

摘要

Background: Lack of access to safe water supply and adequate sanitation services is a major cause of diarrhea in poor urban slums, directly affecting to the livelihoods and incomes of the poor residents by impacting their health and ability to earn. Aims: This paper compares the economic feasibility of implementing interventions to improve water quality at the point of use in a poor urban slum, where the prevalence of water-related diarrhea was estimated at 33% and where increased morbidity and premature mortality impose a socio-economic burden on the local population of 3.4 to 17.1% of area annual income. Methods: Five household intervention alternatives were identified for water quality improvement in a poor urban slum, including replacing deteriorated attic water tanks with rooftop tanks, replacing water piping, replacing wastewater piping, and a combination of these interventions. A social cost-benefit assessment (SCBA) was conducted to evaluate and compare these alternatives under 6 scenarios that combine the ranges of minimum to maximum costs with those of minimum to maximum benefits. The costs were based on capital and operational expenditures while the benefits considered averted morbidity and premature mortality, using various economic tools including the Cost of Illness, the Averted Behavior, and the Disability Adjusted Life Years approaches for morbidity valuation, and the Human Capital Approach for mortality valuation. The applied SCBA methods included the Benefit/ Cost ratio, the Net Present Value, and the Return on Investment. Results: The SCBA revealed that installing rooftop tanks and replacing water piping at the household were the most economically viable interventions, with a Benefit/Cost ratio ranging between 4.6 and 16.8 USD for every 1 USD invested. These alternatives also exhibited a positive return on investment within a maximum of 10 years from implementation. Thus, simple low cost interventions are expected to result in positive health impacts which translate into a significant positive socio-economic impact in a poor urban slum.