Context:
- A 2025 empirical study conducted in Odisha examines how households truly value clean, potable drinking water when access barriers are removed.
- The findings challenge long-held assumptions that rural and low-income households undervalue safe water, offering key insights for water governance, public finance, and service delivery under GS 3 (Economy), GS 2 (Governance), and Prelims.
Key Highlights:
Study Objective and Approach
- The study directly measured the economic value of clean water by observing actual household behaviour, rather than relying on indirect proxies.
- It isolated the value of water independent of collection time, taste, labour, or unreliability.
Methodology and Design
- Conducted across 99 villages in Odisha, where only 17% households had piped water connections (2021).
- Used a Randomized Controlled Trial (RCT) with three experimental arms:
- Price Arm – to estimate Willingness to Pay (WTP).
- Free-Water Arm – served as a benchmark.
- Exchangeable Entitlement Arm – to measure Willingness to Accept (WTA).
Key Findings
- WTP and WTA for clean water were significantly higher than earlier indirect estimates.
- Many households preferred guaranteed clean water over equivalent cash transfers, underscoring its intrinsic value.
- Home delivery reduced reliance on unsafe and irregular sources and significantly cut water collection time, especially for women.
Implications for Water Access
- Previous studies underestimated water’s value because they conflated it with inconvenience, uncertainty, and treatment costs.
- Reliable access reframes water not as a luxury, but as a highly valued essential service.
Relevant Prelims Points:
- Issue: Chronic undervaluation of safe drinking water in policy design.
- Causes:
- Reliance on indirect valuation methods
- Poor access infrastructure
- Irregular supply systems
- Key Concepts:
- Willingness to Pay (WTP) – maximum price a consumer is willing to pay.
- Willingness to Accept (WTA) – minimum compensation required to forgo a good.
- Randomized Controlled Trial (RCT) – experimental evaluation method.
- Benefits of Reliable Water Access:
- Improved health outcomes
- Time savings
- Reduced household burden
- Challenges:
- Fiscal constraints
- Scaling decentralized models
- Impact:
- Strong evidence base for public investment in water services.
Relevant Mains Points:
- Facts & Data:
- Only 17% piped water coverage in Odisha (2021).
- High revealed WTP/WTA contradicts earlier assumptions.
- Conceptual Linkages:
- Water as a merit good and public service.
- Links to SDG 6 – Clean Water and Sanitation.
- Governance Perspective:
- Shifting focus from technology adoption to service delivery.
- Emphasis on dignity, ease, and reliability.
- Economic Analysis:
- Revealed preference methods provide better valuation than stated preferences.
- Way Forward:
- Support decentralized, home-delivery water models.
- Provide targeted subsidies for universal access.
- Integrate valuation evidence into cost-benefit analysis of water schemes.
- Strengthen community-level delivery with accountability mechanisms.