WPS2:661f
POLICY RESEARCH WORKING PAPER   2664
Does Piped Water Reduce                                            Children's health improves on
average as a result of policy
Diarrhea for Children                                              interventions that expand
in    Rural India?                                                access to piped water.
However, the gains largely
bypass children in poor and
Jyotsna Jalan                                                      poorly educated families.
Martin Ravallion
The World Bank
Development Research Group
Poverty
August 2001



| POLICY RESEARCH WORKING PAPER 2664
Summary findings
The effects of public investments aimed at directly             children under five are significantly less on average for
improving children's health are theoretically ambiguous,        families with piped water than for families without it.
since the outcomes also depend on indirect effects              But health gains largely bypass children in poor families,
through parental inputs. Jalan and Ravallion investigate        particularly when the mother is poorly educated. The
the role of such inputs in influencing the incidence of         authors' findings point to the importance of combining
child health gains from access to piped water in rural          infrastructure investments with effective public action to
India.                                                          promote health knowledge and income poverty
Using propensity score matching methods, they find            reduction.
that the prevalence and duration of diarrhea among
This paper-a product of Poverty, Development Research Group-is part of a larger effort in the group to better measure
and understand the welfare impacts of development projects. The study was funded by the Bank's Research Support Budget
under the research project "Policies for Poor Areas" (RPO 681-39). Copies of this paper are available free from the World
Bank, 1818 H Street NW, Washington, DC 20433. Please contact Catalina Cunanan, room MC3 -542, telephone 202-473 -
2301, fax 202-522-1151, email address ccunanan@worldbank.org. Policy Research Working Papers are also posted on the
Web at http://econ.worldbank.org. The authors may be contacted at jjalan@worldbank.org or mravallion@worldbank.org.
August 2001. (30 pages)
The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about
development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The
papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this
paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the
countries they represent.
Produced by the Policy Research Dissemination Center



Does Piped Water Reduce Diarrhea
for Children in Rural India?
Jyotsna Jalan and Martin Ravallion'
Indian Statistical Institute and World Bank
i We thank the National Council of Applied Economic Research for allowing us the use of their data,
and the World Bank's South Asia Poverty Reduction and Economic Management Group for their support.
We are also grateful to Alok Bhargava, John Briscoe, Valerie Kozel, Mead Over, Jennifer Sara, Arijit
Sen, Dominique van de Walle, seminar participants at the World Bank.






1.    Introduction
The World Health Organization estimates that four million children under the age of five die
each year from diarrhea, mainly in developing countries.2 Unsafe drinking water is widely thought to
be a major cause, and this has motivated public programs to expand piped water access.
In this paper, we estimate the impacts on child health of piped water in a developing country.
We argue that expanding piped water is not a sufficient condition to improve child health status in
this setting. The source of ambiguity lies in the uncertainty about how public and private inputs
interact in the production of health conditional on the heterogeneous quality of public inputs.
The private inputs relevant to diarrhea prevalence and duration include hygienic water
storage, boiling water, oral re-hydration therapy, medical treatment, sanitation and nutrition. With the
right combination of these public and private inputs, diarrhoeal disease is almost entirely preventable.
However, behavior is known to play an important role. Public inputs such as access to a piped water
network can either displace parentally chosen private inputs or be complementary to them. Even
when there are child-health benefits (factoring in parental spending effects) the gains could well by-
pass children in poor families, taking account of parental behavioral responses to poverty.
For example, if piped water increases the marginal health benefit for parents of spending
more on their children's health, and such spending is a normal good, then the health gains from piped
water will tend to rise with income. This is not implausible on a priori grounds. Piped water in rural
areas of developing countries is no doubt safer than many alternative sources, but it is often the case
that it still needs to be boiled or filtered and stored properly to be safe to drink. This can be a burden
for a poor family, a poor, or poorly educated mother may reasonably think that there are better uses
of time and money needed to provide this complementary input to piped water.
2 http://www.who.int/aboutwho/en/preventing/diarrhoeal.htm
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It is plausible that there are private inputs that are cooperant with piped water in determining
child health. However, it can also be argued that such private inputs have positive income effects in
this setting, and there is supportive evidence. For example, it is estimated that 29% of the poorest
quintile (in terms of a composite wealth index) of families in rural India in 1992/93 used oral
rehydration therapy when a child had diarrhea, as compared to 50% in the richest quintile (Gwatkin
et al., 2000). Similarly, 52% of those in the poorest quintile sought medical treatment, as compared
to 78% in the richest.
The upshot of all this is that being connected to a piped water network may well be of limited
relevance to the poor from an epidemiological standpoint. Income poverty and lack of education and
knowledge may well constrain the potential health gains from water infrastructure improvements.
The incidence of health gains need not favor children from poor families, even when facility
placement is pro-poor.
This paper looks for evidence of child-health gains from access to piped water. We use a
large, representative cross-sectional survey for rural India implemented in 1993-94. India
undoubtedly accounts for more child deaths due to unsafe water than any other single country. Parikh
et al. (1999) quote an estimate of 1.5 million child deaths per year in India due to diarrhea and other
diseases related to poor water quality. Moreover, estimates indicate that one fifth of the population of
rural India do not have access to safe drinking water (World Bank, 2000). Expanding access to piped
water is considered an important development action in India.
Our aim is not to model the effect of contaminated water on child health in this setting.
Rather we attempt to quantify the child health gains in terms of diarrhoeal disease from policy
interventions that expand access to piped water, and to see how the gains vary with household
circumstances, notably income and education. The main questions we ask are: Is a child less
vulnerable to diarrhoeal disease if he/she lives in a household with access to piped water? Do
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children in poor, or poorly educated, households realize the same health gains from piped water as
others? Does income matter indepefidently of parental education?
The following section establishes the theoretical ambiguity in the effect of access to piped
water on child health. Section 3 discusses the methodology we propose to test for child health gains
from piped water. Section 4 describes our data for rural India. The results are given in section 5,
while section 6 concludes.
2.    A behavioral model of child health
We examine the impact on child health of an exogenous increase in access to piped water,
allowing for parental responses in the provision of other inputs to child health. The increase in
access could arise from an extension of the piped-water network into a community that had relied
previously on a well or stream. We show that once one allows for privately provided health inputs,
and assuming that parents care about more than just their children's health, even the direction of the
effect on children's health is theoretically ambiguous, and becomes an empirical question.
Let the health status (h) of a child depend on its access to piped water (w), parental spending
(s) on private inputs to child health, and a vector of personal and environmental characteristics (x).
The latter could include parental education, which could well enter non-separably with w; for
example, a well-educated mother knows how to make piped water safe to drink and how to treat
illnesses such as diarrhea. The health production function for the i'th child is:
hi = h(s;, W,x,)                                            (1)
The function h is assumed to be strictly increasing and twice differentiable in both s and w and to be
at least weakly concave in s (ruling out increasing returns to s). While w is likely to be a discrete
variable, for analytic convenience we treat it as a continuous variable in this section.
In choosing the level of private spending on child health, the family takes account of its lost
opportunity for consumption of other private goods, treated as a composite. We assume that spending
4



on child health has no intrinsic value to parents beyond its contribution to child health. However,
access to piped water also raises parental welfare. For example, having piped water reduces the time
spent collecting water from a well or stream. Exogenous income is y andy - s is left for parents'
consumption after deducting purchased inputs to child health. This gives parents utility
u (y - s, w, x) in which the function u is strictly increasing and concave in y - s and strictly
increasing in w. Child health matters directly to parental welfare, but separably to their utility from
consumption. Thus the level of s is chosen by parents to maximize:
u(y - s, w, x) + h(s, w, x)                                 (2)
The solution equates the marginal impact of spending on child health with the marginal utility of own
consumption, uy (y - s, w, x) = h5 (s, w, x) (using subscripts to denote partial derivatives), which can
also be written as:
s = s(w, y, x)                                              (3)
This yields a maximum utility to parents of:
v(w, y, x) _ H(w, y, x) + u[y - s(w, y, x), w, x]           (4)
where child health when parental inputs are optimal is given by:
H(w, y, x) = h[s(w, y, x), w, x]                            (5)
By the envelope theorem, v(w, y, x) must be increasing in w. However, this need not hold for both
the components of parental utility. The effect of w on child health in a neighborhood of the
equilibrium in which private inputs are optimal is given by:
Hw = hssw + hw                                              (6)
where:
UW - hs
SW=- hss + u -                                              (7)
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It can be seen that sw has the same sign as hsw - u   which could be positive, negative or zero.
Since the direct health effect is positive (hW > 0), it can be seen from (6) that hs, - u0w > O is
sufficient for piped water to improve child health.
Now consider the income effect on the health gain from piped water. This is given by:
Hwy = sy (hw + swhs, ) + hs swy                             (8)
where
O<sy=      '   � 1                                          (9)
h  +u
In the special case in which there are no interaction effects in parental utility between piped water
and income or spending on child health (h3w = u,m = 0), we find that Hwy = 0; the child health gain
from piped water is independent of household income. More generally however the direction of the
income effect- could go either way. Consider the case in which parental direct utility is additively
separable between consumption and piped water (u,* = 0 ) and piped water does not alter the
marginal propensity to spend on private inputs to child health (syw = 0). Then Hwy = s2h, (using
(7) and (9)). So in this special case, the child health benefit from piped water will increase (decrease)
with income if the piped water is a complement (substitute) for the private inputs.
So far we have taken piped-water placement to be exogenous. In the empirical work we will
allow placement to be a function of a wide range of observable characteristics at household and
village level. Here we can think (quite generally) of the placement as maximizing some weighted
sum of v(w,, xi, y1) over all i, with weights determined by a vector of characteristics of the
individual and his or her socio-political environment. (This might also include any variables
affecting the costs of service provision.) The solutions take the form wi = w(x;, A) where A denotes
one or more multipliers on the constraints, including on resources available for providing the public
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inputs. The task of the empirical work is then to measure the welfare gains from higher w,
recognizing that the observed levels of w in the cross-sectional data reflect purposive placement,
assuming that the relevant x's are observable.
3.    Identifying health impacts in cross-sectional data
We use propensity-score matching (PSM) methods to estimate the causal effects of piped
water on child health in a cross-sectional sample without random placement. PSM balances the
distributions of observed covariates between a treatment group and a control group based on
similarity of their predicted probabilities of having a given facility (their "propensity scores"). The
method does not require a parametric model linking facility placement to outcomes, and thus allows
estimation of mean impacts (including impacts conditional on income, for examnple) without arbitrary
assumptions about functional forms and error distributions. We exploit this flexibility to test for the
presence of potentially complex interaction effects as discussed in theoretical terms in the last
section. In this section we first outline the method, and then summarize its differences with other
methods found in the literature.
3.1   Propensity score matching
Two groups are identified: those households that have piped water (denoted Di =1 for
household i) and those that do not (D1=O). Units with piped water (the "treated" group) are matched
to households without (control group) on the basis of the propensity score:
P(x1) = Prob(D, =1I xi)   (0< P(xi)<l)                      (10)
where x, is a vector of pre-exposure control variables. It is known from Rosenbaum and Rubin (1983)
that if (i) the Di's are independent over all i, and (ii) outcomes are independent of participation given
xi, then outcomes are also independent of participation given P(xi), just as they would be if
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participation were assigned randomly.3 PSM uses P(x) (or a monotone function of P(x)) to select
controls for each of those treated. Exact matching on P(x) implies that the resulting matched control
and treated subjects have the same distribution of the covariates. PSM thus eliminates bias in
estimated treatment effects due to observable heterogeneity.
In practice the propensity score must be estimated. Here we follow the common practice in
PSM applications of using the predicted values from standard logit models to estimate the propensity
score for each observation in the participant and the comparison-group samples.4 Using the estimated
propensity scores, P(x), matched-pairs are constructed on the basis of how close the scores are
across the two samples. The nearest neighbor to the i'th participant is defined as the non-participant
that minimizes [p(xi)-p(xj )]2 over allj in the set of non-participants, where p(xk) is the predicted odds
ratio for observation k i.e., p(xk)= P(xk)/(l -P(Xk)). Matches were onlyaccepted if [p(xj) p(xj )]2
was less than 0.001 (an absolute difference in odds less than 0.032).5
Letting AHj denote the gain in health status for thej'th child attributable to access to piped
water, the estimator of mean impact is:
T          c
AH = Ij(hjl - E Wyh0o)                                   (11)
j=1        i=i
where h;1 is the post-intervention health indicator, hi,o is the outcome indicator of the ith non-treated
matched to the/h treated, Tis the total number of treatments, C is the total number of non-treated
3 Assumption (ii) is sometimes referred to in the literature as the "conditional independence"
assumption, and sometimes as "strong ignorability."
4 Dehejia and Wahba (1999) report that their PSM results are robust to alternative estimators and
alternative specifications for the logit regression.
5 We experimented with more stringent tolerance limits and the results were robust. However, with more
stringent limits we also had to discard many more participants while calculating our impacts. Given that
we already run into small sample problems for certain cells even with this tolerance limit when we
categorize the sample on the basis of income and the level of female education (discussed later), we chose
to report the results pertaining to a tolerance limit of 0.001.
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households, q 's are the sampling weights used to construct the mean impact estimator, and the W,1's
are the weights applied in calculating the average income of the matched non-participants.
Conditional mean impact estimators can be similarly defined by calculating equation (11) conditional
on observed characteristics. For example, comparing the conditional mean AHIy across different
incomes y gives us a discrete estimator of the cross-partial derivative in equation (8).
There are several weights that one can use, ranging from "nearest neighbor" weights to non-
parametric weights based on kernel functions of the differences in scores (Heckman et al., 1997).6
We use the nearest five neighbors estimator, which takes the average outcome measure of the closest
five matched non-participants as the counter-factual for each participant.7
Following Rubin (1973) we also use a regression-adjusted estimator. This assumes a
conventional linear model for outcomes in the matched comparison group, ho = xfi0 + Po in obvious
notation. (The regression is only run for the matched comparison group, so it is not contaminated by
access to piped water.) The impact estimator in this case is then defined as:
T                 C
AH = Zaj [(hjl - xjf0o) - E Wu (hUo - Xifto)]             (12)
j=l               i=I
where 80 is the OLS estimate for the comparison group sample.
3.3    Other non-experimental methods
When feasible, pure randomization clearly dominates non-experimental methods such as
PSM. Unlike randomization, PSM still requires the conditional independence assumption (such that
participation and outcomes are independent given x). How does PSM compare to commonly used
non-experimental methods in this context?
6 Jalan and Ravallion (2000b) discuss the choice fiurther, and find that their results for estimating income
gains from an anti-poverty program are reasonably robust to the choice.
' Rubin and Thomas (2000) use simulations to compare the bias in using the nearest five neighbors to
just the nearest neighbor; no clear pattern emerges.
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There are two main methods of assessing infrastructure impacts found in the literature. The
first is to compare average outcome indicators between villages (or other geographic units) that have
the facility and those that do not. Past methods of assessing health gains from water and sanitation
have often compared villages with piped water and those without (Esrey et al., 1991, review
numerous studies). The outcome indicators have sometimes been at village level and sometimes at
household or individual level. Diverse methods have been used to control for heterogeneity; in some
cases no controls are used, but often some form of matched comparison is made. Clearly failure to
control for differences in village characteristics could severely bias such comparisons. Unlike some
commonly used matching estimates, PSM at village level would optimally balance the observed
covariates. To the extent that there is heterogeneity within villages, the aggregation could make it
hard to identify impact. Against this effect, aggregation to village level may well reduce
measurement error or household-specific selection bias. Moreover, since typically available village-
level data are less comprehensive than individual survey-based data, village-level matching will be
prone to greater bias due to unobserved covariates. We will compare our results using individual
PSM versus village PSM.
The second method found in the literature is to run a regression of the outcome indicators on
dummy variables for facility placement, allowing for the observable covariates entering as linear
controls.8 The widely used OLS regression method requires the same conditional independence
assumption as PSM, but they also impose (typically arbitrary) functional form assumptions
concerning the treatment effects and the control variables. Interaction effects have sometimes been
allowed; for example, Merrick (1985) included interactions between piped water and income and
education in regressions for child mortality in Brazil.
s Early examples include Rosenzweig and Wolpin (1982), Wolfe and Bebrman (1982) and Merrick
(1985); recent examples include Lavy et al. (1996), Hughes and Dunleavy (2000) and Wagstaff (2000).
Strauss and Thomas (1995) survey the large literature following this approach in studying health
outcomes in micro data.
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A variation on this second method is to use an instrumental variables estimator (IVE) treating
placement as endogenous. This method does not avoid an untestable conditional independence
assumption; in the case of IVE this is the exclusion restriction that the instrumental variable is
independent of outcomes given participation. And again the validity of causal inferences rests on the
ad hoc functional form assumptions required by standard (parametric) IVE. Under these assumptions,
IVE identifies the causal effect robustly to unobserved heterogeneity.
The validity of the exclusion restriction required by IVE is questionable with only a single
cross-sectional data set; while one can imagine many variables that are correlated with placement,
such as geographic characteristics of an area, it is questionable on a priori grounds that those
variables are uncorrelated with outcomes given placement. There is more potential for identification
with longitudinal (panel) data, using methods that allow for latent (household and geographic)
heterogeneity (Rosenzweig and Wolpin, 1986; Pitt et al., 1995; Jalan and Ravallion, 2000a).
PSM also differs from commonly-used regression methods with respect to the sample used.
In PSM one confines attention to the matched sub-samples; unmatched comparison units are
dropped. By contrast, the regression methods commonly found in the literature use the full sample.
The simulations in Rubin and Thomas (2000) indicate that impact estimates based on full
(unmatched) samples are generally more biased, and less robust to miss-specification of the.
regression function, than those based on matched samples.
A further difference relates to the choice of control variables. In the standard regression-
based method one naturally looks for predictors of the outcome measure, and preference is usually
given to variables that one can argue are exogenous to outcomes. In PSM one is looking instead for
covariates of participation, possibly including variables that are poor predictors of outcomes. Indeed,
analytic results and simulations indicate that variables with weak predictive ability for outcomes can
still help reduce bias in estimating causal effects using PSM (Rubin and Thomas, 2000).
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4.    Data
We use a household survey conducted by India's National Council of Applied Economic
Research in 1993-94. This is a nationally representative survey collecting detailed infornation on
education and health status of 33,000 rural households from 1765 villages covering 16 states of India.
Multi-stage sampling design was used where income from agriculture and rural female literacy rates
were the variables used to form homogeneous strata. From these strata a certain number of districts
were selected with probability of selection proportional to the rural population in the district. The
survey collected detailed information on health status of household members. The income survey
used 12 questions to arrive at a total income, comprising income from allied agricultural activities,
artisan/independent work, petty trade/small business, organized trade/business, salaried employment,
qualified profession, cattle tending, rent, interest, dividends, other sources, imputed income from
agriculture, annual income of the household from agricultural work and annual income of the
household from non-agricultural work.
We aim to measure the child-health effects of access to piped water. The latter is indicated by
whether the household reports access to piped water from a tap either inside or outside the house.
Applying the household weights in the data, 24.8% of households had piped water (7.6% inside the
house and 17.3% outside).' The proportion of households with piped water varies little with income
(Table 1). In the main analysis we do not distinguish whether the tap is inside or outside the house,
on the grounds that this difference only matters to health outcomes via parental behavior, so the
difference is subsumed in studying the relationship between access to a piped water and child health.
However, it is still of interest to test for differences in impact according to whether the piped water is
a tap inside the house or a public tap, given the obvious possibilities for stored water contamination.
We provide such a test.
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We examine impact on the prevalence of diarrhea among children under five years of age and
the reported illness duration. And we assess incidence against household income per person and by
the highest education level of any female in the household.
The sample includes 9,000 households with piped water and 24,000 without. Table I gives
sample sizes for those with piped water stratified by income and female education. Unlike standard
matching techniques we match "treatment" group with "non-treatment" group from the same
household survey. This means that standard requirements of getting better matches are easily met,
such as that treatment and counterfactual groups have the same questionnaire administered to them
and that they belong to the same economic environment.
5.    Impact estimates
5.1   Estimated child-health impacts using PSM at household level
Table 2 reports the estimates of the logit regression where the binary outcome takes a value
one if the household has access to piped water and zero otherwise. The regressors comprised a wide
range of village and household characteristics including seemingly plausible proxies for otherwsie
omitted variables. The village variables included agricultural modernization, and measures of
educational and social infrastructure. The household variables included demographics, education,
religion, ethnicity, assets, housing conditions, and state dummy variables.
While we saw little sign of correlation between households with piped water and income in
Table 1, there are a number of significant explanatory variables of piped water placement in Table 2.
The results are generally unsurprising. Households living in larger villages (in terms of population),
villages with a high school, a "pucca" ("sealed") road, a bus stop, a telephone, a bank, and a market
were more likely to have piped water. The probability of scheduled tribe (but not scheduled caste)
households having access to piped water was lower compared to the non-minority population.
Christian households were more likely to have access to piped water. Owning a home made it less
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probable; this is unlikely to be a (perverse) wealth effect, but to be related to the fact that demand for
rental housing tends to come from relatively well-off people in rural India, and so this type of
housing tends to be better equipped. Other housing characteristics have the expected effects, such as
living in a pucca house and having electricity. Female-headed households are more likely to have
piped water. A positive wealth effect controlling for these other characteristics is indicated by the
fact that the more land one owns the greater the probability that one has access to piped water.
Prior to matching, the estimated propensity scores for those with and without piped water
were respectively 0.5495 (standard error of 0.285) and 0.1933 (0.184). Figure 1 reports the
histograms of the estimated propensity scores for the two groups. From the original sample, we lose
approximately 650 treatment households due to our inability to find a sufficiently good match. After
matching there was negligible difference in the mean propensity scores of the two groups (0.3743,
with a standard error of 0.189, for those with piped water versus 0.3742, with a standard error of
0.189, for the matched control group).
Table 3 reports descriptive statistics for the full sample of households with piped water as
well as when the sample is stratified by both income and the highest level of education among female
members. (Here and elsewhere we use the sampling weights provided in the data). The overall
prevalence of diarrhea is L1 1% in the sample, with an average of 0.33 days of illness and a mean
expenditure of 0.74 rupees per episode of diarrhea. Disease prevalence and length of illness fall with
higher income and education. For example, diarrhea prevalence amongst infants in families with
piped water is twice as high for those in the poorest quintile than the richest.
The estimated mean impacts on the child-health indicators are also given in Table 3. The
results for mean impact indicate that access to piped water significantly reduces diarrhea prevalence
and duration. Disease prevalence amongst those with piped water would be 21% higher without it.
Illness duration would be 29% higher. The regression-adjusted impact estimator (equation 12) gave
very similar results (using the full set of regressors in Table 2 as the x vector). The impact estimator
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for diarrhea prevalence was -0.0023 (with a standard error of 0.053) and for diarrhea duration it was
-0.1005 (standard error of 0.021).
Once we stratify the sample by quintiles based on income per capita, we find no significant
child-health gains amongst the poorest two quintiles (roughly corresponding to the poor in India, by
widely used poverty lines). However, from the 40t quintile onwards there are very significant
impacts on child health in households with piped water. We see that the income gradient amongst
those with piped water is almost entirely attributable to piped water. For example, we can infer that
without piped water there would be no difference in infant diarrhea prevalence between the poorest
quintile and the richest. Health impacts from piped water tend to be larger and more significant in
families with better educated women. We found a similar pattern when we stratified instead by the
highest education of the household head.
In Table 4 we report the joint effects of income and female education to test the hypothesis
that income and female education interact jointly with piped water in determining child health. When
we stratify by both income and education, we find that even in the bottom two quintiles, if a woman
in the household has more than primary school then the household extracts significant gains from
piped water in terms of lower prevalence and duration of diarrhea among children. However, these
gains are not visible if the highest level of education among female members in the household is at
most primary school. The effect of education is absent in the upper quintiles. Irrespective of the
education levels of the female members in the household, there are significant gains to child health
in households with access to piped water. These results suggest that among poorer households, the
education of women matters greatly to achieving the child-health benefits from piped water.
We have defined a household with piped water to be one with access either via a tap in the
premises of the household or from a public tap nearby. A concern with this broad definition is that
perhaps it disguises the differences in impacts of having the facility inside the house versus outside.
To test for such differences we analyze the sub-sample of households with access to either source of
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piped water and compare the health outcomes (prevalence and duration of diarrhea) of children
among households with a tap in the household to those who rely on public tap to get drinking water.
Our results are reported in Tables 5 and 6.
There is little overall difference in the impact on the prevalence of diarrhea between
households with piped water inside the home versus those using a public tap (Table 5). However,
illness duration is nearly 40% higher in households where the source of drinking water is a public tap
rather than a tap within the household premises, suggesting less contamination due to storage and
hence less severe illness in the latter case.
We find a very strong differential impact of a private tap on both the duration and the
prevalence of diarrhea among households where the female member is uneducated. With some
education, however, there is no difference in the health outcomes of children across households
categorized on the basis of source of piped water. Finally, when we stratify the sample with respect
to income and education, we find that it is only among households where the female member is
illiterate that there are strong impacts of having the piped water source inside the household.
5.2    Village-level estimator
We compared the above results to village-level matching, as might be done with only village-
level data. For the purpose of comparison, we confine the matching to village-level data from a
village survey (not using village aggregates formed from the household data). Out of 1624 villages in
the sample, 324 had piped water. Far fewer control variables were available at village level; we
included 20 variables, instead of the 90 variables used for household-level matching. The control
variables for estimating the propensity score at village level were (log)village size, share of land
irrigated in gross cropped area, schools in the village, female to male student ratio, proportion of
people belonging to a scheduled caste/tribe, and (agricultural and non-agricultural) wages and prices
in the village. Only the wage rate variables were individually significant, though the LR test
16



indicated the explanatory variables were jointly significant and the pseudo-R2 was 0.2294. After
checking for common support, we could estimate impact for 262 villages against a matched control
group of nearest neighbors in terms of the propensity score. We used the nearest neighbor as opposed
to nearest five neighbors to match villages because it was difficult to find matches which satisfied
our tolerance limit criterion in terms of the metric distance between the propensity score ratios of the
treated and the controls for a large number of observations.
Wer found that diarrhea prevalence and duration were not significantly different in the
villages with piped water compared to the matched control villages. The impact estimates were
0.0012 for diarrhea prevalence and 0.1001 for duration and neither was significantly different from
zero at even the 10% level (standard errors of 0.024 and 0.1001 respectively).
6.    Conclusions
It can be expected that parental choices about private inputs to child health will respond to
changes in the household environment. This has implications for understanding the incidence of
child-health benefits from local infrastructure development. Potential health benefits may not be
realized in practice. For example, there may be little benefit to children in poor families if private
inputs (with positive income effects) and public inputs have cooperant effects on health. Or the
incidence of child-health gains could be decidedly pro-poor if the private and public inputs are in fact
substitutes.
To investigate this issue we have used the propensity score matching method to quantify the
expected health gains to children from piped water, and to examine how those gains vary according
to income and education. This method is well suited to the present application since it allows a
flexible (nonparametric) description of the interaction effects with income and education. While the
method does not require ad hoc assumptions about the functional form of impacts and exclusion
restrictions, it only eliminates selection bias due to observable differences between those with piped
17



water and those without it. While we have used a rich data, allowing us to match on a wide range of
characteristics, the possibility remains of latent factors correlated with both access to piped water and
child health.
We have estimated impacts on diarrhea prevalence and duration in children under five. We
find significantly lower prevalence and duration of the disease for children living in households with
piped water as compared to a comparison group of households matched on the basis of their
propensity scores. However, matching at village level instead does not indicate lower diarrhea
prevalence or duration.
There are striking differences in the child-health gains from piped water according to family
income and adult female education. While there are significant health gains overall from access to
piped water, we find no evidence of significant gains for the poorest 40% in terms of incomes.
Indeed, the income gradient in disease prevalence and duration is attributable to piped water; no
income effect is found for the matched control group. Health gains from piped water tend to be lower
for children with less well-educated women in the household. Here education is no doubt proxying
for knowledge about how to assure that water is safe to drink and how best to treat illness. The
income effect on the child-health benefits from piped water is also found at given levels of education,
though it is not as pronounced.
When we look at only the sub-sample of households with access to either source of piped
water and compare the prevalence and duration of diarrhea among children under five across
households with access from a tap inside the house versus access via a public tap we find two
striking effects: first the duration of illness is reduced significantly if households have drinking water
source within the premises. Second, the impact is greater in households where the female member is
illiterate.
A number of messages for policy emerge from this study. We confirm that there are
statistically significant, and quantitatively non-negligible, mean impacts of piped water on an
18



important aspect of child health. However, we also find that the average impact is a deceptive
indicator for inferring gains to children in poor families. Policy makers trying to reach children in
poor families-who are typically the most prone to disease-will need to do more that relying on
making facility placement pro-poor, such as by locating interventions in poor areas. The incidence of
health gains need not favor children from poor families even when placement favors the poor. The
evident weakness of the impacts we find amongst the income poor, and poorly educated, points to the
importance of combining public investments in this type of infrastructure with other interventions in
education and income-poverty reduction.
19



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22



Table 1: Access to piped water across the income distribution and by education
Income quintiles      Number of  Percentage of       Households with piped water stratified by highest education
(stratified by household  observations  people with                   of female members
income per person)                 piped water  Illiterate   At most  At most    Higher secondary  Full sample
primary    matriculation    or more
Bottom 20'h percentile  6581         27.18       768       655          251             33            1707
20h-40' percentile      6508         25.40       674       590          274             29            1567
40th-60' percentile     6543         26.96       667       560          371             60            1658
60th-80* percentile     6694         29.62       660       602          462             90            1814
Top 20l percentile      6904         33.63       665       593          638             185           2081
Full sample             33230        28.62       3434      3000         1996            397           8827



Table 2 Logit regression for piped water
Coefficient        t-statistic
Village variables
Village size (log)                                    0.08212             4.269
Proportion of gross cropped area which is irrigated: >0.75  -0.04824      -1.185
Proportion of gross cropped area which is irrigated: 0.5-0.75  0.19399    4.178
Whether village has a day care center                 -0.07249            -2.225
Whether village has a primary school                  -0.08136           -1.434
Whether village has a middle school                   -0.09019            -2.578
Whether village has a high school                     0.26460             7.405
Female to male students in the village                0.10637             3.010
Female to male students for minority groups           -0.07661            -2.111
Main approachable road to village:    pucca road      0.19441             3.637
jeepablelkuchha road        -0.00163            -0.033
Whether bus-stoop is within the village               0.11423             2.951
Whether railway station is within the village         0.00920             0.179
Whether there is a post-office within the village     0.02193             0.550
Whether the village has a telephone facility          0.33059             9.655
Whether there is a community TV center in the village  0.09859            2.661
Whether there is a library in the village             -0.04153            -1.116
Whether there is a bank in the village                0.19084             4.655
Whether there is a market in the village              0.31690             6.092
Student teacher ratio in the village                  0.00242             5.295
Household variables
Whether household belongs to the Scheduled Tribe     -0.21288            -4.203
Whether household belongs to the Scheduled Caste     -0.01045            -0.288
Whether it is a Hindu household                      -0.24195            -1.709
Whether it is a Muslim household                     -0.21631             -1.427
Whether it is a Christian household                   0.40367             2.426
Whether it is a Sikh household                       -0.86645             -4.531
Household size                                        0.00337             0.571
Utilization of landholdings: used for cultivation?    0.17109             1.914
Whether the house belongs to the household           -0.18988             -2.854
Whether the household owns other property            0.00181              0.044
Whether the household has a bicycle                  -0.26514            -8.243
Whether the household has a sewing machine            0.01183             0.252
Whether the household owns a thresher                -0.05790             -0.577
Whether the household owns a winnower                 0.21842             1.820
Whether the household owns a bullock-cart            -0.25900             -5.430
Whether the household owns a radio                    0.01036             0.251
Whether the household owns a TV                       0.08095             1.335
Whether the household owns a fan                      0.01336             0.321
Whether the household owns any livestock             -0.07780            -2.339
Nature of house:   kuchha                            -0.10004            -2.775
Pucca                             0.12039             2.709
Condition of house:   good                           0.00230              0.036
Livable                           0.09268             1.756



Rooms in house:    one                                -0.10771            -1.371
Two                                0.06822             0.952
threetofive                        0.07514             1.112
Whether household has a separate kitchen              -0.01993            -0.533
Whether the kitchen is ventilated                     0.08103              2.212
Whether the household has electricity                 0.40641             11.217
Occupation of the head: cultivator                    -0.02425            -0.481
agricultural wage labor            0.02432             0.429
Non-agricultural wage labor        0.14628             2.254
Self-employed                     -0.06921             -0.955
Whether male members listen to radio                  0.20089              3.484
Whether female members listen to radio                -0.12415            -2.177
Whether male members watch TV                         0.09365              1.291
Whether female members watch TV                       0.03863              0.493
Whether male members read newspapers                  0.08950              1.813
Whether female members read newspapers                -0.04066            -0.631
Proportion of household members who are 60+           -0.11370            -1.067
Proportion of females among adults                    0.04646              0.331
Proportion of males among children                    0.08436              0.779
Proportion of females among children                  0.05498              0.498
Whether household head is male                        -0.18041.           -2.321
Whether household head is single                      -0.16659             -1.268
Whether household head is married                     -0.02603             -0.422
Whether household head is illiterate                  -0.13048             -1.454
Whether household head is primary school educated     -0.03694             -0.416
Whether household head is matriculation educated      -0.03364            -0.385
Whether household head is higher secondary            -0.05545             -0.475
Gross cropped area                                    -0.00020            -0.666
Gross irrigated area                                  -0.00050             -1.342
Landholding size:    landless                         -0.32849             -3.996
marginal                          -0.31056             -3.987
small                             -0.22129             -2.916
Constant                                              -1.49531            -5.396
Log-likelihood function                                       -16236.565
Number of observations                                           33216
Notes: In addition to the above variables 15 dummies were included to control for state specific effects.
25



Table 3: Impacts of piped water on diarrhea prevalence and duration for children under five
Prevalence of diarrhea         Duration of illness
Mean for those    Inpact of    Mean for those  znpact of
with piped    piped water   with piped     piped water
water       (st.error)      water         (st.error)
(st.dev.)                   (st.dev.)
Full sample         0.0108        -0.0023*       0.3254        -0.0957*
(0.046)       (0.001)       (1.650)         (0.021)
Stratified by household income per capita
Bottom 20kh         0.0155        0.0032*        0.4805         0.0713
percentile          (0.055)       (0.001)        (2.030)        (0.053)
20*"40"             0.0136         0.0007        0.4170         0.0312
percentile          (0.051)       (0.001)        (1.805)        (0.051)
401-60h lb0.0083                 -0.0039*        0.2636        -0.1258*
percentile          (0.038)       (0.001)        (1.418)        (0.042)
60"'-80h            0.0100       -0.0036*        0.3195        -0.1392*
percentile          (0.044)       (0.001)        (1.703)        (0.048)
Top 20              0.0076       -0.0068*        0.1848        -0.2682*
percentile          (0.042)       (0.001)        (1.254)        (0.036)
Stratified by highest education level of a female member
Illiterate          0.0131        -0.0000        0.3588        -0.0904*
(0.053)       (0.001)        (1.710)       (0.036)
At most primary     0.0112        -0.0015        0.3502         -0.0465
school educated    (0.045)        (0.001)        (1.739)        (0.036)
At most             0.0074       -0.0065*        0.2573         -0.1708*
matriculation       (0.038)       (0.001)        (1.476)        (0.039)
educated
Higher secondary    0.0050       -0.0080*        0.1880         -0.2077*
or more             (0.027)       (0.002)        (1.158)        (0.076)
Notes: *indicates significance at the 5% level or lower
26



Table 4: Child-health impacts of piped water by income and education
Illiterate               At most primary            At most mnatriculation   Higher secondary or more
Prevalence of   Duation of   Prevalence of   Duration of   Prevalence of   Duration of   Prevalence   Duration of
diarrhea      illness       diarrhea       illness       diarrhea       illness     of diarrhea    illness
0-20            0.0100*        0.1028        0.0010         0.0548       -0.0118*        -0.1091          Small Sample
percentile       (0.002)       (0.089)       (0.002)       (0.094)        (0.003)       (0.132)
20"-40oh        0.0057*        0.0777        0.0013         0.1061       -0.0121*       -0.2580*          Small Sample
percentile       (0.003)       (0.083)       (0.002)        (0.083)       (0.002)       (0.087)
40th-60*h       -0.0038*      -0.1503*       -0.0008        0.0056        -0.0069*      -0.1659*          Small Sample
percentile       (0.002)       (0.069)       (0.002)       (0.081)        (0.002)       (0.059)
60th-80th       -0.0062*      -0.2224*      -0.0041*        -0.1691       0.0008         -0.0186          Small Sample
percentile       (0.002)       (0.097)       (0.002)        (0.070)       (0.003)        (0.091)
80oh- 1OO       -0.0075*      -0.2932*      -0.0051 *      -0.2435*      -0.0063*       -0.2578*      -0.010*     -0.2637*
percentile       (0.000)       (0.045)       (0.002)       (0.075)        (0.002)        (0.008)       (0.003)      (0.085)
Notes: Figures in parentheses are the respective standard errors; *indicates significance at 5% or lower.
27



Table 5: Differential impacts of piped water inside the house (rather than outside) on diarrhea
prevalence and duration for children under five
Prevalence of diarrhea       Duration of illness
Mean for those  Impact of   Mean for those   lmpact of
with piped water piped water with piped water  piped water
(st.dev.)   inside the     (st.dev.)    inside the
house                       house
(st.error)                  (st.error)
Full sample             0.0162       -0.0018       0.4865       -0.1991*
(0.058)      (0.002)       (2.065)       (0.062)
Stratified by household income per capita
Bottom 20th             0.0246       0.0027        0.7189        0.0499
percentile             (0.069)       (0.005)       (2.555)       (0.175)
20h-40&h percentile    0.0207        0.0006        0.6825        -0.1577
(0.062)      (0.004)       (2.568)       (0.178)
40e-60h percentile      0.0132      -0.0055**      0.4907       -0.2849**
(0.050)      (0.003)       (2.251)       (0.172)
60h -80'h percentile   0.0148        -0.0018       0.4647       -0.2360**
(0.053)      (0.003)       (1.767)       (0.126)
Top 20th percentile    0.0113        -0.0035       0.2452       -0.2898*
(0.054)      (0.058)       (1.307)       (0.082)
Stratified by highest education level of a female member
Illiterate             0.0208       -0.0051**      0.5711       -0.5060*
(0.065)      (0.003)       (2.173)       (0.117)
At most primary        0.0163        0.0007        0.6210        0.0565
school educated        (0.056)       (0.003)      (2.541)        (0.128)
At most matriculation  0.0102        -0.0015       0.2640        -0.1178
educated               (0.046)       (0.003)      (1.252)        (0.076)
Higher secondary or    0.0122        0.0031        0.2198        -0.0389
more                   (0.053)       (0.004)      (1.078)        (0.107)
Notes: *indicates significance at the 5% level or lower, ** indicates significance between 5%-
10%
28



Table 6: Differential impacts of piped water inside the house by income and education
Illiterate              At most primary          At most matriculation   Higher secondary or more
Prevalence of   Duration of   Prevalence    Duration of   Prevalence    Duration of   Prevalence   Duration of
diarrhea      illness     of diarrhea    illness     of diarrhea    illness     of diarrhea    illness
0-20th       0.0008       -0.2230       0.0075        0.3882            Small sample               Small sample
percentile    (0.007)      (0.213)      (0.008)       (0.351)
20h-40'h    -0.0046        -0.4479      0.0066        0.1826            Small sample               Small sample
percentile    (0.007)      (0.312)      (0.007)       (0.305)
40'h-60'h   -0.0049       -0.6150*      -0.0007       0.2445      -0.0116*      -0.4139**          Small sample
percentile    (0.007)      (0.305)      (0.006)       (0.368)      (0.006)       (0.220)
60'h-80'h   -0.0025       -0.5763*      -0.0023       -0.1776      0.0009        0.0646            Small sample
percentile    (0.008)      (0.267)      (0.004)       (0.242)      (0.005)       (0.174)
80oh-100oh    -0.0121*    -0.6549*     -0.0075*       -0.3211       0.0033       -0.0585       0.0071       0.0277
percentile    (0.006)      (0.199)      (0.004)       (0.117)      (0.005)       (0.123)       (0.008)      (0.202)
Notes: Figures in parentheses are the respective standard errors; *indicates significance at 5% or lower, ** indicates significance level between
5%-10%.
29



Figure 1: Histogram of propensity scores
Propensity score for households with piped water
.077951
0 |
.00969                                                                      .943526
Probability of having access to piped water
Propensity score for households without piped water
.169717 -
0  -        .
.007527                                                                .904426
Probability of having access to piped water
30






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