Demand analysis in a basic needs framework: The case of rural water supply in central India

Anand Narain Asthana, Fordham University


In poor countries like India, the Governments often take upon themselves the responsibility of providing safe drinking water to the people inhabiting the rural areas. A supply driven program can become unsustainable in the long run. This research looks at the demand side and finds that free water is not necessarily the best policy because the capability to pay and willingness to pay already exists. A conditional logit model has been used to identify important determinants for making choices in favour of one alternative over the other. Maximum likelihood method has been used to estimate the parameters. In villages without piped water supply, we find that people's perception of benefits of safe water is significant and they are willing to travel large distances and spend time to get safe water even where unsafe water is near at hand. The proportion of women in the household and their education are important determinants in choosing safe water whereas household size and income have no significant influence over the choice. In villages with piped water supply, we find that households with a larger size, lower proportion of women, higher proportion of men and higher income tend to choose a yardtap and pay for it instead of getting free water from the public standpost. Educational level does not seem to affect the choice in this case. In quantitative terms, we find that on the average, people value their time at a rate slightly less than half the rural wage for unskilled workers. This valuation increases with income level. We conclude that in view of changing circumstances, there is a need to provide minimum service to all and a higher level of service to those who are willing to pay more.

Subject Area

Economics|Urban planning|Area planning & development

Recommended Citation

Asthana, Anand Narain, "Demand analysis in a basic needs framework: The case of rural water supply in central India" (1994). ETD Collection for Fordham University. AAI9425185.