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The Economics of Sanitation Initiative: An Introduction
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The Economics of Sanitation Initiative: An Introduction

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This PowerPoint was presented by WSP Senior Economist, Sophie Hickling, during AfricaSan 3 (Kigali, Rwanda - 2011) under the "Economics of Sanitation for Advocacy and Decision Making" session. …

This PowerPoint was presented by WSP Senior Economist, Sophie Hickling, during AfricaSan 3 (Kigali, Rwanda - 2011) under the "Economics of Sanitation for Advocacy and Decision Making" session.

This session introduced the Economics of Sanitation Initiative (ESI) aims, rationale, and methods. A panel of experts from government, donors and other sector specialists in Africa commented on the use of ESI results for sanitation financing; the use of media to influence stakeholders; the mechanisms for adopting ESI results into government decision making; and critical assessment and proposed improvement to ESI methods.

Published in: Business, Technology

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  • 1. The Economics of Sanitation Initiative: An Introduction Guy Hutton Senior Economist, Consultant Water and Sanitation Program
  • 2. ESI in Southeast Asia Overall Goal: Advocate for increased investments, and provide evidence for efficient planning and implementation of sustainable sanitation services Motivating factors • Low priority • Lack of evidence Geographical locations 5 year study Household sanitation focus Study phasing
  • 3. Study Phases Phases: 1. Impact Study: Analyze economic impacts of current sanitation arrangements & hygiene practices; and estimate potential gains from improvements based on analysis of secondary data 2. Options Study: Analyze costs and benefits of different sanitation options to inform policies and programs which ones to select based on primary surveysPhase 1: Selection of analysis levels ‘Outputs’ – Focus on the National level – Total cost – Health damage costs by age – Cost as % of GDP – Available water quality data – Cost per person – Illustrative case studies, where available
  • 4. Economic Impacts - % of Gross Domestic Product 8 7 6 5 4 3 2 1 0 Cambodia India Lao PDR Indonesia Philippines Vietnam Tourism User preferences Environment Water Health Strong inverse relationship between sanitation coverage and economic impacts across 6 Asian countries.
  • 5. Economic Impacts - % of Gross Domestic Product International Dollar (ID)* United States Dollar (USD) 220 200 180 160 140 120 100 80 60 40 20 0 Cambodia India Lao PDR Indonesia Philippines Vietnam Considerably larger costs per capita when taking into account differences in purchasing power, compared with prices in the USA.
  • 6. Methodological IssuesOr…what do the results really mean? Valuation • What is life worth? • Poor sanitation’s contribution to water degradation and its economic consequences Non-financial Financial • Valuing tourism development aided by a clean 7,000 environment 6,000 Economic versus financial cost 5,000 • Financial = direct and impact on cash 4,000 3,000 Who incurs the cost? 2,000 • Part private cost, part externality • Variation between country 1,000 0 Underestimates of damage cost • Conservative estimates • Omitted impacts
  • 7. Dissemination
  • 8. www.wsp.org

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