Equity impacts of informal private water markets: Case of Kathmandu Valley

Abstract

South Asia is a hotspot for populations and economies adversely impacted by poor water security. This is evident in the case of Nepal where it has been estimated that 20% of households have no access to a domestic water source and two-thirds of the urban households live with inadequate water supply. Therefore, many depend on private solutions, such as private wells and purchasing water from informal water markets, to meet household water needs. Within this context, this paper examines whether private water vendors provide equitable access to both poor and wealthy households, whether they practice discriminatory pricing and whether poor households face a greater financial burden in meeting their household water needs. The analysis uses primary data collected from a 1,500-household survey conducted in 2014 and uses regression analyses to derive the results. The results reveal patterns of inequity in the private water market, but seemingly not purely due to an inherent bias against poorer households. Regardless, the market does not serve the poor adequately and given the lack of alternatives that poor households have, it points to an urgent need for the government to step in to counterbalance the deficiencies of the market.