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Valuing Safe Drinking Water Supply

in Rural Myanmar

M 046468

Graduate School for International Development and Cooperation, Hiroshima University

August 1, 2006

THI THI KHIN

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Contents

1. Introduction

2. Methodology

(Application of Contingent Valuation in Rural Myanmar)

3. Results

4. Conclusion

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Water Supply in Myanmar

Background of the Issue

Drinking water sources (mainly water ponds) are often unprotected in rural Myanmar:

- Poor quality: polluted with bacteria and viruses

- Causing water-borne diseases such as Diarrhea, Hepatitis, Typhoid and Cholera

Protecting and upgrading drinking water supply is much needed to reduce human health risks

1.Introduction

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1.IntroductionStudy Area

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1.IntroductionStudy Area

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Drinking Water Pond in Wet Tsu Village

Photo taken by author on 3/14/2006

1.Introduction

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Using Hand Pumps in villages

Photo taken by author on 3/14/2006

1.Introduction

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Objective

Objective: Estimate the economic value of establishing safe drinking water supply in rural part of Myanmar

Valuing the Environment: - Measuring the values of environmental goods (better water/air quality, forest, urban green space and so on)- Costs money and uses up real resources plus overall satisfaction of welfare (utility)

1.Introduction

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The Use of WaterTable 1. Relationship between GDP per capita and access to Safe Drinking Water Sources in some selected Countries

Source: UN-ESCAP and Human Development Reports

1.Introduction

  1990 2002

  GDP per capita (US$)

Access water from improved

source (% of total

population)

GDP per capita (US$)

Access water from improved

source (% of total

population)

Malaysia 2,467 - 3,970 95

Thailand 1,562 81 2,028 85

Philippines 725 87 975 85

Indonesia 628 71 806 78

Pakistan 467 83 495 90

Sri Lanka 449 68 812 78

India 382 68 482 86

Myanmar 127 48 202 80

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Methods for Valuing Environment

Stated Preference

Revealed PreferenceTravel cost

Hedonic Pricing

Contingent Valuation

Conjoint

2.Methodology

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Previous Studies

Table 2.Previous Studies’ WTPs for Drinking Water

No.

Authors Objectives Study Area

Method WTP per month

1. Memon A. M. and Matsuoka S. (2001)

Estimate the economic benefit of project

Pakistan (Rural Area)

Benefit Transfer, CVM, OLS

(41.42 Rs =0.74 US$) 1.02% of income

2. Dutta V. (2003) To obtain an estimate of the value of urban water supply improvements

Delhi Probit , Logit , CVM

(160.56 Rs =0.23US $)

2.Methodology

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Previous Studies

No.

Authors Objectives Study Area

Method WTP per month

3. Mones de Oca Soto Gloria, Bateman J. I., Tinch R. and Moffatt G Peter (2002)

1.Maintenance 2.Improvement of water supply changes

Mexico City

CVM, Probit Model

1) 123 pesos(10.76US$ )(2.85% of income 2) 142 pesos (12.42US$)( 5.27% of income

4. Nam K.P. and Hung Son V. T. (2003)

To improve water services in Ho Chi Minh City

Ho Chi Minh City

Multinomial logit , CVM and CM

Piped 3.5% incomeNon-piped 4.1%-4.6%

Table 2.Previous Studies’ WTPs for Drinking Water

2.Methodology

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Survey Outline

- Survey period: March 9 - 16, 2006

- Survey area: 4 villages in Myanmar delta region

- 660 households (return rate: 71%)

- Door to door distribution questionnaires

- Preliminary pilot survey in the region

Application of Contingent Valuation in Rural Myanmar

2.Methodology

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QuestionnaireQ1. Suppose, there is a drinking water supply project in your area namely “ Shwe

Yay Cho Ya Shi Yet Project”. This will provide you safe drinking water from tanks or tube wells and you can get the whole year. It is expensive for installation of this equipment but you don’t need to pay construction and installation cost due to the special project of the Government. But you should contribute cooperative fund as monthly charge for operation, maintenance and management cost to get long term benefit.

a) Upgrade your health condition by avoiding water related diseases

b) Time and labor saving to fetch water and you can get extra income by working extra hours

c) Save money for medical cost by improving drinking water quality

If the monthly fee for this fund is 200 Kyats per household, would you be willing to pay this amount?

Yes No

Q1-1 To whom answered “Yes” in Q1, Q1-2 To whom answered “No” iQ1, if the fee is 400 Kyats, would if the fee is cheaper 100 Kyats, would you be willing to pay the fee? you be willing to pay the fee?

2.Methodology

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Table 3.Selected Socio-economic Characteristics of Ngaputaw Township, Study Area and Sample (2006)

Source: Township Peace and Development Council Office and Survey

  Township Study Area Sample

Population 225,058 4,904 2,329

Family Size 5.1 4.68 4.96

Number of Households 54,060 1,046 468

Average monthly income

30,000 (Kyats)(31.58 US$)

27,500(Kyats)(28.94 US$)

25,000(Kyats)(26.32 US$)

Number of under 12 years children 19% 27% 27%

Women 44% 45% 44%

Literacy rate 100 100 100

Empirical Study 2.Methodology

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Estimation of WTP

The basic regression equation is:

Pr(x): Probability for choosing improved water services

errorINCCHILUAGEQUANBIDx 543210 10)Pr(

3.Results

BID = Hypothetical amounts of monthly fees for proposed project (log form)

QUAN = Water quantity drunk per day (dummy)

AGE = Age in years

U10 CHIL = Number of under 10 years children

INC = Income

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***P<0.01

Table 4. The Estimated Results of the Double Bounded Logit Model

3.Results

***P<0.01

Variable Coefficient Std. Error

CONS 8.02 *** 0.88Log of bid -1.62 *** 0.10Log of income 0.16 *** 0.05Water Consumption 0.21 0.14Age 0.44 0.43Number of U10 child dummy -0.22 0.14

n 313χ2 598.16

Median WTP 450Mean WTP 610

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The Estimated WTP

(monthly per household)

-Median WTP : 450 kyats (0.47 U.S. Dollars)

- % of the mean household income: 1.84%

3.Results

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-The estimated benefit (running cost only) for the study area (4 villages) is

470,700 (kyats) = 495.47 (US$ ) per month or 5,648,400(kyats) = 5,945.68 (US$) per year

- Estimated running cost would be 5276 US$ per year(source: Ueda Toyotaka, 2004)

- Benefit-Cost ratio is 1.12

The Estimated Benefit & Cost

(in money term)

3.Results

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- The estimated WTP is consistent with existing studies (in terms of the share of income)

- WTP results can show the respondents are favor to the

proposed project, they are eager to contribute to the

operation and maintenance cost for proposed project even

though their incomes are low

Conclusion4.Conclusion

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Conclusion

-The estimated WTP may not be sufficient to all the

costs necessary to establish and maintain safe drinking

water

-Initial cost should be supplied from external sources

( e.g ODA or other financial assistance)

4.Conclusion

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ReferencesDutta,V.“Public Support for Water Supply Reforms in Unplanned Sector: Empirical Evidence from an Urban Water Utility”, GDN Medal Award Paper, 7th GDN Annual Conference, St. Petersburg, Russia, 2005.

Freeman III A.M. “The Measurement of Environmental and Resource Values: Theories and Methods”. Resources for the Future, Washington DC, 2003.

Nam Khanh Pham and Hung Son Vo Tran, “Households Demand for Improved Water Services in Ho Chi Minh City: A comparison of contingent valuation and choice modeling estimates”. Research report EEPSEA, 2003.

Haab T. and McConnell K.E, “Valuing Environmental and Natural Resources: The econometrics of non-market valuation”, Edward Elgar, Cheltenham, UK, 2003.

Memon M.A. and Matsuoka S. “Benefit Transfer Function to Estimate WTP for Rural Water Supply in Pakistan”, Journal of International Development Studies, Vol. 10, No.2, pp. 101-119, 2001.

Whittington. Dale, “The Challenge of Demand Assessment in Pro-Poor Infrastructure projects” PPIAF/ADB Conference on Infrastructure Development – Private Solutions for the Poor: The Asian Perspective, 2002.