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This is part three in a series looking at the economics of clean water. So far, we have discussed the benefits of point of use water filters when there is an alternative market for clean water and when there is no alternative market for clean water. In both cases, based on my experiences, the economics were strongly positive, benefiting the beneficiary and society as a whole.
This installment looks at the benefits of better health on the economics of a family and then extrapolates those benefits to all of Haiti. On my last trip to Haiti, I was walking with a man in the village of Tomazeau who had received his filters a few months prior. He had four children and was remarking that one thing he had noticed was that his family did not have to make trips to the hospital when the kids got sick with diarrhea. The money he saved on not having to pay hospital bills was very pleasing to him but he said “but the hospital sure misses us.”
So, here is an estimate of his economics. A visit to a clinic in Tomazeau costs 100 goudes or $2.20 USD. If the man’s family of 6 (four kids plus his wife and himself) took eight trips to the hospital/ per month, it would cost him $18/month (USD) excluding drug costs. Let’s add another $1 per trip for drugs, the total cost for drinking bad water would be $26/month. Remember the monthly income of an average Haitian is $85/month USD so this man was spending about 30% of his monthly income treating the consequences of bad water. The present value of those costs over 10 years is $1,700.
An installed filter, hygiene education and follow up costs $330 USD. So, by putting in a filter, the net benefit to society is $1,370 ($1,700 cost savings - $330 filter costs). That is a rate of return of around 93%. So, if we look at Haiti over all, let’s assume there are 1,000,000 family units. At a cost of 330 per family, the total cost to bring clean water to Haiti would be $330 million but the net benefit to society would be $1.4 billion. Additionally, while the hospital may miss the monthly visits from this man and his family, they can use their free time treating other medical issues which provides a benefit not included in my calculations.
So, now we have taken three different looks at understanding the economics of clean water and each has come up with a significant positive benefit to the people and society as a whole. Isn’t it time we committed our abundant resources to fix this very solvable problem?