Demand for environmental quality: Averting behaviors impacts and valuation in Southern Ghana

Abstract

Using a cluster randomized evaluation in Southern Ghana, this paper estimates the impacts of water quality testing and information on averting behaviors, demand and expenditures on water, sanitation and hygiene (WASH). Households are randomly assigned into either child treatment or adult treatment or comparison group. The study also elicits households' valuation of water quality testing and information using a stated preference approach. The study finds that averting behaviors and expenses on WASH increased more in the treatment households than the comparison households. The results also show that the experiment does not lead to demand for WASH information and infrastructure, except for water treatment in the adult treatment group. Contingent valuation estimates of households' willingness to pay (WTP) for water quality testing and information are lower than the cost, and are consistent with previous studies which show low valuation of water quality technology in Ghana. The WTP in the treatment groups are lower than the comparison group. The study also finds differential impacts on some of the outcome measures based on the random assignment into the treatment groups. The results have research and policy implications on the demand for preventive health goods and environmental quality in developing countries.