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Economic Feasibility Study for Improving Drinking Water Quality: A Case Study of Arsenic Contamination in Rural Argentina

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Abstract

Economic studies are essential in evaluating the potential external investment support and/or internal tariffs available to improve drinking water quality. Cost–benefit analysis (CBA) is a useful tool to assess the economic feasibility of such interventions, i.e. to take some form of action to improve the drinking water quality. CBA should involve the market and non-market effects associated with the intervention. An economic framework was proposed in this study, which estimated the health avoided costs and the environmental benefits for the net present value of reducing the pollutant concentrations in drinking water. We conducted an empirical application to assess the economic feasibility of removing arsenic from water in a rural area of Argentina. Four small-scale methods were evaluated in our study. The results indicated that the inclusion of non-market benefits was integral to supporting investment projects. In addition, the application of the proposed framework will provide water authorities with more complete information for the decision-making process.

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Notes

  1. According to the UNDP (2012), improved sources are a piped household water connection located inside the user’s dwelling, plot, or yard, public taps or standpipes, tube wells or boreholes, protected dug wells, protected springs, or rainwater collection. Unimproved drinking water sources are unprotected dug wells, unprotected springs, carts with small tanks/drums, surface water (rivers, dams, lakes, ponds, streams, canals, irrigation channels), and bottled water.

  2. Externality refers to any consequence (positive or negative) of a purchase or use decision by one set of parties on others who did not have a choice and whose interests were not taken into account.

  3. Many reports and books have been published describing these methods. For more information, see Alberini and Kahn (2006) or Carson (2011).

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Acknowledgments

The authors wish to acknowledge the financial aid received from the Spanish government through the NOVEDAR-Consolider Project (CSD2007-00055), from the European Commission through the projects FP7-ENV-2010 (265213) and LIFE10 ENV/ES/000520 and from Banco Santander thorough Becas Iberoamerica Programm. María Molinos-Senante also would thanks to Generalitat Valenciana (APOSTD/2013/110) for financial support. They would also like to thank anonymous referees and editor for their valuable comments and suggestions.

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Authors and Affiliations

  1. Department of Mathematics for Economics, Faculty of Economics, University of Valencia, Campus dels Tarongers, Avd. Tarongers S/N, 46022, Valencia, Spain

    María Molinos-Senante & Ramón Sala-Garrido

  2. Centro de Estudios Transdisciplinarios del Agua, Facultad de Ciencias Veterinarias, University of Buenos Aires, Av. Chorroarín 280, C1427CWO, Buenos Aires, Argentina

    Alejo Perez Carrera & Alicia Fernández-Cirelli

  3. Department of Applied Economics II, Faculty of Economics, University of Valencia, Valencia, Spain

    Francesc Hernández-Sancho

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  1. María Molinos-Senante
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  2. Alejo Perez Carrera
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  3. Francesc Hernández-Sancho
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  4. Alicia Fernández-Cirelli
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  5. Ramón Sala-Garrido
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Correspondence to María Molinos-Senante.

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Molinos-Senante, M., Perez Carrera, A., Hernández-Sancho, F. et al. Economic Feasibility Study for Improving Drinking Water Quality: A Case Study of Arsenic Contamination in Rural Argentina. EcoHealth 11, 476–490 (2014). https://doi.org/10.1007/s10393-014-0948-5

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