Burlig Fiona, Jina Amir and Sudarshan Anant, ‘The Value of Clean Water: Experimental Evidence from Rural India’, Studies in Indian Politics, NBER Working Paper 33557, 2025
Water is an essential resource with no substitute. Despite its fundamental importance, a large proportion of the global population lacks access to safe drinking water. Only 30% of people in low-income countries, and just 14% of those in rural areas, have reliable access to potable water, resulting in a significant decline in quality of life. India is no exception, with many communities facing persistent challenges in accessing safe water.
Discussions on water access and quality are widespread across development research, public policy, and global health, reflecting their importance to well-being and everyday life. Although there is extensive literature on how households obtain water, and on the technologies used to make it safe, much of existing research estimates valuation indirectly — through hedonic pricing, adoption of chlorine or filters, or studies of piped-water take-up. What remains far less explored is a direct measure of how much households value clean, potable water independent of the burdens of collection time, taste, labour, or irregular access that shape earlier estimates.
This paper contributes to research on improving access to clean water and joins a broader conversation within environmental economics literature on measuring how people in low-income countries value environmental quality. It addresses this gap by delivering clean water directly to households and observing real purchasing and exchange behaviour, measuring both Willingness to Pay (WTP) and Willingness to Accept (WTA) under conditions where non-monetary burdens are removed. This approach allows the study to examine how households order water, how sensitive they are to price, and whether they prefer receiving water or equivalent cash. In addition, the study assesses associated benefits, including changes in water sources, collection time, household water treatment practices, and self-reported health. In doing so, it offers a clearer picture of how people perceive the importance of water quality. It offers insights into interventions that could expand access to safe drinking water in contexts where infrastructure remains uneven, and treatment burdens fall heavily on households. The findings provide evidence that can inform effective and equitable drinking water policies in low-income settings.
Measuring the value
The study was conducted in Odisha, a State where access to water remains limited. As of 2021, Odisha ranked 32nd out of 37 States in piped water coverage, with 83% of households lacking connections. A 2023 survey found that 41% of villages still lacked safe drinking water. Water access has been a key local concern in the State, leading to protests and dissatisfaction among the population. Against this backdrop, the study implemented a randomised controlled trial across 160 villages, with successful execution in 99 villages where a private company already operated water treatment facilities. Households were randomly assigned to different experimental arms, allowing researchers to observe behaviour under conditions where clean water was delivered directly, removing typical burdens of collection, transport, and taste-related aversion, and capturing variations across income, water habits, and baseline access.
Households were assigned to one of three experimental arms designed to reveal distinct dimensions of valuation. In the price arm, households could purchase clean, home-delivered water at several subsidised price points. Observing the quantity ordered at each price allowed researchers to estimate willingness to pay based on revealed behaviour and identify price sensitivity. This arm also provided a comparison to prior studies that focused on demand for treatment technologies rather than clean water itself.
In the free-water arm, households received potable water at zero price, serving as an unconstrained benchmark. The quantity consumed in this arm reflected genuine demand independent of financial limitations and provided a contrast with the price arm to separate preference from affordability.
The exchangeable entitlement arm offered households entitlements that could either be redeemed for water or exchanged for cash of equivalent value. Their choices revealed willingness to accept compensation to forgo clean water, which is particularly meaningful in low-income contexts with limited substitutes and where governments often provide cash transfers.
Randomisation within villages ensured that differences in behaviour were attributable to treatment conditions rather than geographic or infrastructural disparities. By removing the non-monetary costs associated with traditional water access, the study captured a more accurate picture of how households value clean water. In doing so, it provides policy-relevant insights on how to structure water delivery, subsidies, and interventions in settings where infrastructure and treatment burdens fall heavily on households.
Valuing clean water
The study’s findings reveal several important patterns regarding how households perceive and value clean water. Both WTP and WTA estimates were substantially higher than those reported in earlier studies that relied on indirect measures, such as chlorine adoption or time-use patterns, suggesting that prior work underestimated the true value of potable water due to the bundled inconveniences of collection and treatment. WTA values, in particular, were strikingly high, indicating households’ strong reluctance to forgo clean water even when offered cash. While demand did respond to price increases, the decline was moderate, highlighting that clean water is considered a necessity rather than a discretionary good. In the exchangeable entitlement arm, many households chose water over equivalent cash, reinforcing the preference for guaranteed access over short-term monetary gain. Access to home-delivered water also led households to shift away from less reliable sources, reducing collection time and alleviating burdens that disproportionately affect a few. Finally, although health outcomes were self-reported, households indicated improvements in physical well-being, suggesting immediate perceived benefits from reliable clean water access.
Understanding choices
These findings highlight an important insight: when clean water is made easily accessible, households demonstrate a far higher valuation than previously assumed. This challenges common interpretations that low-income households do not care about water quality or are unwilling to pay for treatment. Instead, what they resist are the associated inconveniences — taste, effort, labour, and uncertainty.
By isolating water quality from these burdens, the study shows that people value purity deeply, and that their choices reflect a practical understanding of its importance for health and daily functioning. The strong WTP-WTA gap also reflects a psychological dimension: households may be wary of losing access once they experience the benefits of reliable, safe water.
This study, therefore, contributes a new way of thinking about water valuation, one that centres the service rather than the technology. It suggests that uptake of chlorine or filters may not reflect low valuation of cleanliness but instead reflect aversion to the method of treatment due to difficulties in adoption or financial constraints.
While it would have been interesting to also examine quantifiable health improvements rather than relying solely on self-reported outcomes, the behavioural evidence remains compelling.
The findings point to actionable government strategies: support decentralised, home-delivery models in areas with limited piped infrastructure; provide subsidies or pricing aligned with households’ willingness to pay; and integrate entitlement-based systems for vulnerable households to ensure universal access. Such measures can act as effective interim solutions while long-term infrastructure is expanded.
The study reframes water access, not as technology adoption, but as making safe water easy, reliable, and dignified, and contributes to our understanding of household perceptions of water.
Rebecca Rose Varghese is a freelance journalist.
Published – December 10, 2025 08:30 am IST
