Are Bangladeshi urban slum landlords ready to pay for safe water? - Willingness-to-pay for an automated chlorination device at shared water points in Dhaka, Bangladesh
Sonia Sultanaicddr,b
2016 Water and Health conferenceChapel Hill, North Carolina
10th October, 2016
Introduction• >130 million people living in urban areas of developing countries
lack access to safe water¹
• In Dhaka, Bangladesh, almost one third (3.4 million) of the population lives in slums and obtains water through shared water points²
• Approximately 80% of these water points are contaminated with fecal indicator bacteria
• Centralized disinfection at a water treatment plant, and point-of-use treatment by individual households -- both have consistently failed to provide safe water in Dhaka³ ⁴
Objective
This study estimates demand (willingness to pay) amongBangladeshi slum Landlords for a novel water treatment device(Aquatabs Flo) that is attached to shared water points drawing water from the public water network
Aquatabs Flo Water Purification System
Method
• Study period:
February 2015 - March 2016
• Study sites:
Purposively selected slums in Sattola and Mirpur, Dhaka
• Study participants:
Landlords and tenants of rental housing units(compounds)
• Sample size:
100 compounds with a goal of selling 40 installation and refill service packages
Method
Compound Selection criteria:
1)5-30 households
2)Shared water points that is Acquatabs Flow compatible
3)Legal, billed water connection to public network
Method
Baseline survey ofLandlords and households with informed consent
One to one
marketing and
promotion with
Landlord
One to one Becker-
Degroot-Marschak
(BDM) auction
with interested Landlords
Installation of service package in
compounds where
Landlords won the auction
Follow up household
survey &
Monthlypayment collection
for 12 months
MethodAcquatabs Flow service packages:2 Service package options with 6 different prices for each
Package 1:• Consists of a Acquatabs Flow
device and monthly refills• Prices include (USD) $0.65, $1.3,
$3, $4, $5, $ 7Package 2:• Consists of a Acquatabs Flow
device, monthly refills, a new hand pump and its maintenance
• Prices include (USD) $2, $3, $4, $5, $7, $8
W A T E R P U R I F I C A T I O N S Y S T E M
F O R A M O R E P R O S P E R O U S C O M M U N I T Y
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Convenient – Low cost – Maintenance free
Works even without electricity
Quick to install and serviced by trained technicians
Safe water for all your uses
0000000 – 0000000– 00000000
00000000000000000000
00000000000000000000000000000000000
MethodBecker-Degroot-Marschak (BDM) auction method⁵:The BDM auction elicits maximum binding bids in a way that incentivizes participants to reveal their true willingness to pay (WTP)⁶
Auction procedure with Landlords:
Acquatabs Flow installation
Bid price > Lottery price= Win
Matching bid price with lottery price
Lottery with six closed envelops
Selection of a price from the 6 fixed costs (the bid price)
Selection of service package 1 or 2
Method
Payment collection:
• First monthly payment was collected during the day of device installation
• Additional payment was collected on a monthly basis
• In the event of non-payment, the device was removed
Result
Landlord enrolled
in Baseline N=131
Landlordparticipated
in Marketing
N= 98
Landlordparticipated in Auction
N=79
Landlord won
AuctionN=64
Total LandlordrefusalN=98
Householdenrolled in
BaselineN=420
98(75%) 79(81%) 64(81%) 40(63%) 29(30%) 332(79%)
Table-1: Study participation
• In each stage participation was higher in Sattola then Mirpur
• 33 Landlords refused baseline and 22 (67%) of them refused to participate due to short duration of the service contract
•38(95%) Landlords installed the Acquatabs flow in their compound
Results
Mean willingness to pay (WTP):
• 72% of the Landlords chose Acquatabs Flow service package 1
• Mean monthly WTP was 294BDT (US$4) including both packages among the auction participant. The current estimated cost for a similar service is 480 BDT (~US$6) which is slightly higher than the mean WTP
• The mean WTP was 254 BDT (US$3) for package 1 and 395 BDT (~ US$5) for package 2
• Assuming 0 WTP for the device among the Landlords who refused to participate either in marketing or auction, then mean monthly WTP was 237 BDT (~US$3)
Results
Continuation of monthly payment:
• 47% (18) of the Landlords paid monthly fees up to 4 months
• 32% (12) of the Landlords paid monthly fees up to 6 months
• 21% (8) of the Landlords paid for the disinfection service throughout the 12 months period
Result
Chlorine Dosing:
• The aim was to control and maintain the chlorine residual in the water between 0.1 mg/L- 2 mg/L of free chlorine
• To avoid taste and smell complaints from enrolled households the chlorine residual in water was kept below 2 mg/L
• 742 water samples were tested across 28 compounds between May, 2015 - April, 2016
• 77% of the samples had 0.1 mg/L or above for free chlorine residual with an average free chlorine residual of 0.64 mg/L
• Typical refill frequency ranged from 2-10 weeks
Reasons for uninstallation We had to uninstall the chlorination device from 30(79%) of the compounds at various stage of monthly payment collection
Major reasons for uninstallation :
1) Direct connection with central piped water supply bypassing the tank where the device was installed due to water scarcity (water point became incompatible with device) (8 compounds)
2) Tenant complaints about smell and taste of chlorinated water (8 compounds)
3) Inability to continue monthly payment (4 compounds)
4) Due to an incident of using degraded reagents before May, 2015, the team was not successful in controlling the dosing and ensuring optimal user satisfaction; 10 compounds uninstalled the device during this period
Conclusion•21% of the Landlords paid the monthly service fee for 12 month with a mean monthly WTP of 294BDT (US$4) for the Aquatabs Flo device
•Findings inform target monthly service price for Dhaka
•Customer turnover for the business model should be expected
•Chlorine taste and smell complaints related to overdosing are still a major challenge for water purification using chlorine products in Dhaka
•Our team has explored the chlorine taste detection threshold in Dhaka to inform dosing targets
•We are currently conducting a chlorine demand test study to further understand and overcome the chlorine dosing issue
•Also currently conducting a second phase study to understand WTP among higher income landlords (multi-story buildings)
Recommendation
• Further adaptation of the chlorination device to fit it on taps or hand pumps would help to prevent uninstallation due to direct connection of the compound water line with the central piped water supply bypassing the underground or overhead Tank during water scarcity
• Further study with longer duration of chlorination device service package might increase participation and generate more insights to the viability of a landlord-targeted business and marketing strategy for water treatment
References 1. Zwane, A.P. & Kremer, M., 2007. What Works in Fighting Diarrheal Diseases in
Developing Countries? A Critical Review. World Bank Res Obs, 22(1), pp.1–24.
2. UNDP, UNDP in Bangladesh 2013, Recognizing Slums in Bangladesh. Available from: <http://www.bd.undp.org/content/bangladesh/en/home/presscenter/articles/2013/10/03/recognizing-slums-in-bangladesh.html>. [3 October 2013].
3. Arnold B, Arana B, Mäusezahl D, Hubbard A, Colford JM Jr., 2009. Evaluation of a pre-existing, 3-year household water treatment and handwashing intervention in rural Guatemala. Int J Epidemiol, 38(6):1651-61.
4. Luby SP, Mendoza C, Keswick BH, Chiller TM, Hoekstra RM., 2008. Difficulties in bringing point-of-use water treatment to scale in rural Guatemala. Am J Trop Med Hyg,78(3):382-7.
5. Berry, J. M., Fischer, G. M., & Guiteras, R. P. (2012). Eliciting and Utilizing Willingness to Pay: Evidence from Field Trials in Northern Ghana. Unpublished.
6. Luoto, J., Mahmud, M., Albert, J., Luby, S., Najnin, N., Unicomb, L., et al. (2012). Learning to Dislike Safe Water Products: Results from a Randomized Controlled Trial of the Effects of Direct and Peer Experience on Willingness to Pay. Environmental Science & Technology , 46 (11), 6244-6251.
icddr,b:Dr. Mahbubur RahmanMohammad Rofi UddinShabiha Begum All Field staff
Co-authorsYoshika CriderAmy PickeringNajrin AkterFrederick GoddardSyed Anjerul IslamLeanne UnicombStephen P. LubyAtonu RabbaniJenna Davis
All the research participants Contact: [email protected]
Stanford UniversityJenna Swarthout
Acknowledgments
Medentech, Ireland: Kevin O’Callaghan
Innovation for Poverty Action, Bangladesh
icddr,b thanks its core donors for their on-going support
This project has been fundedJPAL/IPAUSAIDStanford University Woods Institute for the Environment
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