Bennett examines whether access to clean water reduces incentives for sanitation in Cebu, Philippines. Using panel data from 1983-2005, he finds: 1) A negative correlation between piped water access and sanitation levels, suggesting water and sanitation may be substitutes as clean water allows people to endure dirtier environments. 2) Increased diarrhea is associated with community access to piped water, consistent with reduced sanitation efforts. However, household access is linked to less diarrhea. 3) Instrumental variable models exploiting topological characteristics correlated with water access but not sanitation still find evidence that piped water reduces sanitation and increases diarrhea, indicating a causal relationship. 4) A robustness check

1. DoesCleanWaterMakeYouDirty?
WaterSupplyandSanitationinthePhilippines
JournalofHumanResources(2012)
DanBennett,HarrisSchoolofPublicPolicyStudiesatUniversityofChicago
Presented by:
Jeff van Geete

2. “Do behavioral responses
undercut the expected health
benefits of clean water
provision?”
Research
Question

3. Consider a
simple health
production
model:
yi =ai +B1X+B2Y+ci
Ifunivariateregression
oneitherXorYresultsin
apositivecoefficient,
whywouldoneofthe
abovecoefficients be
negative?
Answer:
Clean water and sanitation may be substitutes if
clean water enables the recipient to endure a dirtier
environment without sacrificing health. Households
also may face a budgetary tradeoff between
sanitation and water.
Although the degree of substitutability between
these inputs may vary by setting, clean water and
sanitation are negatively correlated in the present
context of Cebu.

4. Previous
Literature
Clean water seems beneficial in some
contexts but ineffective or even harmful in
others (Fewtrell et al. 2005)
 Kremer and Miguel (2004, 2007) find positive
externalities for school attendance and social learning
about the benefits of a deworming program.
 Kremer et al. (2007) find a marginally significant health
impact of spring protection in rural Kenya.
 Lipscomb and Mobarak (2008) examine the impact of
political decentralization on pollution spillovers in
Brazil (shirking).
 Lakdawalla, Sood, and Goldman (2006) argue that
antiretroviral drugs encourage risky sexual behavior
(shirking).

5. Motivations
&
Limitations
“In an effort to internalize the externality, the
community may invoke social norms or other
strategic mechanisms that lead to a
sanitation complementarity (Ostrom 2000;
Bandiera, Barankay, and Rasul 2005;
Banerjee, Iyer, and Somanathan 2006).”
Bennett draws much of his motivation from Peltzman’s
shirkers (1975) and Akerlof’s social norms (1980)
Causal mechanism relies on strategic interactions
Like Fisman and Miguel’s (2007) “Norms” paper,
only parking fines are replaced by the costs of
keeping clean in a dirty environment.

6. Setting
 Metro CebuWater District (MCWD) delivers chlorinated piped water to
~40 % of area households
 110 high volume deep wells, which are located inland from the city, stores
water in several area reservoirs
 $86 for installation, $2.70 per month for a half-inch connection, and $0.30
( vs. $0.65 in Denver) per cubic meter of water.
 This fee schedule subsidizes poor households - “community well”
 A household is defined as having piped water if the MCWD is its “usual
main source of drinking water”
 Cebu lacks a centralized sewer system (500T of public defecation)

7. Data
N = 3,000HH, 22 yrs
Source:CLHNS
Why not just
compare means?
 Water prevalence
maybe endogenousto
sanitation
 Cebu Longitudinal Health and Nutrition Survey (CLHNS):
 Panel survey of ~3,000 households over 22 years; includes all
households that experienced a birth from June 1983-May 1984 in
33 randomly selected barangays (out of 79 inCebu, ~42k total).
 74 percent barangays that are designated as “urban.”
 Surveyors conducted 12 bimonthly interviews with each
household from 1983 to 1985, and followed up five additional
times from 1991 to 2005
 As a panel survey, the CLHNS captures a sample that is relatively
young in early rounds and old in late rounds.
 fertility-selected sampling methodology (children
 CLHNS lacks reliable measures of income or monetary wealth
 Data on diarrhea only from the 12 bimonthly surveys, 1983–85
 Collapsed into a 12-period count variable for “anyone” in the HH
having diarrhea in the last week.

8. How does
Bennett help
us answer the
research
question?
i substitutes water
and sanitation…
…but different i’s
have complementary
sanitation
An individual’s health-maximization problem…
…defines his/her ‘best
response’ functions:
Through the implicit
function theorem, the first
order condition for
sanitation yields the
partial effect of
clean water on sanitation:
Which lets us sign the effects of
interest:

9. Comparative
static models
give predictions
}Driving mechanism
Health Responses Endogeneity of piped water
}Robustness Check
(SoilThickness)

10. Table 1: Different
onObservables
si = {0,1}
measuredby surveyors
fromMCWD

11. Piped water
prevalence at
years of survey

12. Negative
correlation
between piped
water and
sanitation

13. Positive
correlation
between piped
water and self-
reported
diarrhea…
…probably a
good thing!*
(* Unless substitution
manifests as shirking!)

14. Table 2:
_
6% worse
sanitation response
from a movement
of 1 SD (0.34) in wi

15. Table 3
sd(w) = 0.27
…but 8% more diarrhea
associated with community
clean water usage.
 Consistent with s
complementarity
9% less diarrhea associated
with household clean water
usage…  sd(w) = 0.51 (?)
_

16. Makinga “super
instrument”
Pipedwaterandsanitation
wouldbeendogenousifdirtier
placesconsumemorewater
FromEq11(Table2)…
Cov(wi,ei)
≠ O
recovervariationusing
topologicalcharacteristics
correlatedwithaccesstopiped
water,uncorrelatedwiths(ER)

17. Table 4:
First-stage:
w = ai+zi+ei
Second-stage:
si = ai+ B1w+B2X+ei
_
^

18. Table 6:
SoilThickness
(arobustnesscheck)
28% more diarrhea
for thickest soil
 sd(T) = 0.53 (?)
10-13% lower sanitation
at thickest soil

19. Take-away /
Conclusion
To our understanding of sanitation’s complementary
effects, Bennett adds those substitutive effects at the
household level which may constrain our expected
returns from investment in developing nations.
 Akerlof (1980) describes how a social norm may induce a large
strategic complementarity. Compliance with a social norm
strengthens the norm, which encourages greater compliance.
 One explanation for Bennet’s findings is that clean water has
interfered with a social norm of sanitation. For some, the sanitation
benefits of shirking outweigh those from adherence to norms.
 Clean water recipients were cleaner without clean water

20. Bonus:
Table 5 - Placebo
Education,likehealth,isan
investmentinhumancapital
preferencesandSES
aredeterminantsofboth
Doeseducationrespondto
cleanwater?
No(wedon’twantitto)