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The Economics of Clean Water

Source: Pure Water for the World - Mon, 16 Jun 2014 16:34 GMT
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Jeremy Jeziorski
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Any views expressed in this article are those of the author and not of Thomson Reuters Foundation.

I have always believed in the compassionate story of clean water. It seems a matter of basic justice that every human being should have access to clean, safe water. Lately however, I have been thinking a lot about the economics of clean water. Does what we do improve the economic wellbeing of a family? Will it be reflected in a rise in the standard of living of a village or maybe even a country? Here is some evidence that says it resoundingly does.

Whenever I talk with recipients of Pure Water’s program, I always ask what the filters have meant to them. Recently, a Haitian woman told me her story.  Prior to receiving her filter, she had to buy potable water in Port au Prince. She is a street vendor and lives in a village about an hour from her work. The water cost her about USD $.25/gallon.  Once she got the filter, she stopped buying the water and was able to save some money. With her savings she moved her mother into her home. Now, her Mother cooks the food that the woman sells. Prior to the filters, the woman could only sell 3-4 days/week because she had to stay home and cook the other days. Now she is able to sell every day. She told me that her income has DOUBLED since receiving the filters.

After hearing her story, I created a little spread sheet based on her data. The table below shows the results.  I assumed that a household of 5 uses 2 gallons per person per day of water that cost them $.25/gallon.  I also assumed that program costs (filter plus hygiene education and follow-up) cost $329 and that the filter would last for 10 years. 

Program Investment

Economic Benefit

Filter Rate of Return

$329

$9,125

2,700%

 Using these assumptions, an investment of $329 yields an economic benefit of $9,125, which is quite astonishing. Now, considering the woman’s net worth was probably zero before, it is no wonder that she was so ecstatic about her new situation.

So, next time you hear someone say that water programs do not help lift people out of poverty, tell them this woman’s story and show them these numbers because they are dead wrong.

Next up, I will look at the situation where clients don’t buy water but only have access to contaminated water. That is also an interesting analysis, so stay tuned…………  

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