Working Paper: NBER ID: w15280
Authors: Michael Kremer; Jessica Leino; Edward Miguel; Alix Peterson Zwane
Abstract: In many societies, social norms create common property rights in natural resources, limiting incentives for private investment. This paper uses a randomized evaluation in Kenya to measure the health impacts of investments to improve source water quality through spring protection, estimate the value that households place on spring protection, and simulate the welfare impacts of alternative water property rights norms and institutions, including common property, freehold private property, and alternative "Lockean" property rights norms. We find that infrastructure investments reduce fecal contamination by 66% at naturally occurring springs, cutting child diarrhea by one quarter. While households increase their use of protected springs, travel-cost based revealed preference estimates of households' valuations are only one-half stated preference valuations and are much smaller than levels implied by health planners' typical valuations of child mortality, consistent with models in which the demand for health is highly income elastic. Simulations suggest that, at current income levels, private property norms would generate little additional investment while imposing large static costs due to spring owners' local market power, but that private property norms might function better than common property at higher income levels. Alternative institutions, such as "modified Lockean" property rights, government investment or vouchers for improved water, could yield higher social welfare.
Keywords: water quality; health impacts; property rights; valuation; Kenya
JEL Codes: C93; H75; O13; Q25; Q51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| property rights regimes (P14) | social welfare (I38) |
| spring protection interventions (J65) | reduce fecal contamination at the source (Q53) |
| reduce fecal contamination at the source (Q53) | reduction in child diarrhea rates (J13) |
| spring protection interventions (J65) | reduction in child diarrhea rates (J13) |
| spring protection interventions (J65) | increase use of protected springs (Q25) |
| increase use of protected springs (Q25) | improved water quality (Q25) |
| spring protection interventions (J65) | household valuation of spring protection (G52) |