Poorer households are often willing to pay more for water and sanitation services than what they cost to operate and maintain, research in Cambodia shows [1]. Researchers used household data from a range of Cambodian urban settings to assess the demand for water and identify the main factors determining household access to network water. Outside Phnom Penh the urban water coverage rate is only 15 percent. Many people obtain their water from rivers, streams, tanks, wells or private vendors at prices that are usually about ten times higher than the official rate.

An examination of 200 household variables and price data reveals that:

• educational attainment levels are higher among connected households compared to non-connected ones;
• members of an ethnic (mainly Chinese) minority are more likely to be connected compared to the majority Khmer group;
• connected households have significantly greater assets than non-connected ones: a household with a telephone is 33 percent more likely to be connected than a household without a telephone;
• a one percent increase in the water connection fee reduces the probability of a household getting connected by about two-fifths.

The researchers advise policymakers in Cambodia and other developing countries, to use targeted subsidies to encourage more poor households to connect. Once they are connected even the less well-off households may be able to afford a non-subsidised tariff. This advice is based on growing evidence that with targeted connection subsidies, the probability of excluding a deserving household is significantly smaller than with a general consumption subsidy.

[1] Basani, M., Isham, J. and Reilly, B. (2008), The determinants of water connection and water consumption : empirical evidence from a Cambodian household survey. World development ; vol. 36, no. 5 ; p. 953-96. doi:10.1016/j.worlddev.2007.04.021. See also a related paper by same authors published in 2004: Water demand and the welfare effects of connection : empirical evidence from Cambodia. Download here.
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Contact: Marcello Basani, Department of Economics, University of Trento, Italy, marcello.basani@economia.unitn.it

Tags: east asia & pacific, financing, urban wash, water supply