The Value of Clean Water: Experimental Evidence from Rural India

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 increasingly popular alternative: 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. Self-reported health measures improve. 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. On a cost-per-disability-adjusted-life-year basis, free water delivery regimes appear highly cost-effective.