The (Surprising) Truth About the Cost of a Drink of Water
Guest Post on Agora’s Blog, By Jacob Falkovich, Agora Research Fellow
Not a Drop to Drink
How much does water cost? I could purchase my water in the form of Voss mineral water, a $3.99 bottle supplies me with about a third of the drinking water I need per day. I drink New York tap water instead, at $0.0045(1) a gallon I feel like I’m getting a great deal. Once in my life, I spent a few months living in a tent and having to walk a couple minutes to fill an old canteen with water that was a little bit… dusty. But it wasn’t too bad.
The problem is that according to the UN 663 million people(2) don’t have access to an “improved water source” and 1.8 billion(3) use a drinking-water source contaminated with feces. 2.4 billion people don’t have access to an “improved sanitation facility”. In plain English, some of them defecate on the street or in a plastic bag(4). That is too bad.
Access to water has attracted the attention of the biggest global foundations(5) and organizations, and of Agora for Good’s clients as well. Tackling this global-magnitude issue requires solutions that are effective, scalable and measurable. Measurable in liters, in days, in people and communities with access to water and sanitation. Data is hard to find, but it’s there to be discovered and analyzed. Most of the data in the analysis below was collected by a single water-focused NGO, but it wasn’t brought together the way it is here. This research is on a simple question: how much money does it take to solve the problem of access to water?
Measuring impact — Water For People
Water For People(6) is an international nonprofit working across 9 countries to bring lasting access to safe water and sanitation to 4 million people. It is a co-investor in hardware costs and the institutions (public and private) that support and sustain systems that provide clean, safe water. The organizations goal is summed up in the motto “Everyone, Forever” — ensuring that every single person in the districts where Water For People operates has access to water and sanitation, and that the access is sustainable for the future. Water For People stands out in its excellent reporting platform: EF Tracker(7). EF Tracker combines survey data with automatically collected electronic information from monitored water points. Combined with a commitment to measure and report results for at least 10 years in every district, the platform provide a unique opportunity to measure the organization’s impact and effectiveness in achieving its goals.
EF Tracker combines the various measurements into two metrics: ubiquity of water service (Everyone) and its sustainability (Forever). Here’s a chart of the progress on water ubiquity in Cascas, a mountainous region in the northwest of Peru:
The “Everyone” score combines several measurements. For example, 77% of the people in Cascas have access to a water point but these water points have had several down days almost every month with only 44% of them providing a high enough quantity of water every day of the year. “Forever” measures the infrastructure around each water point: whether someone charges for, repairs and maintains it or whether it is only likely to survive until the next part wears down and breaks.
Breakdown of the 40% Everyone score for 2015 in Cascas, Peru
Slightly simplified, Everyone (E score) is the percentage of people in the district that have access to good water at a given time. Forever (F score) is the likelihood that access to water will be available for the next 10 years without additional external aid. For sanitation, Water For People calculates a unified EF score. Combining the scores allows us to measure how many people will have access to water and sanitation for each year in the next decade by counting Sanitation-Water-Person-Year, or SWPY (pronouncedswoopie). A score of 100% on Everyone and Forever means that every single person in the district will have reliable access to clean water and sanitation for the next decade, earning 20 SWPYs.
SWPY = (District population) x ((Water E score x F score) + (Sanitation EF score)) x (10 years) = People with a year’s access to water or sanitation.
In 2011, only 14% of Cascas’ 14,191 inhabitants had access to water, and it was only 14% likely to be sustainable for 10 years. That’s a combined Everyone Forever score of just 14% * 14% = 1.96% for water. The EF score for sanitation is reported at 16%. The combined SWPY score was:
Cascas SWPY2011 = 14,191 people * (14%*14% + 16%) * 10 years = 25,487 SWPY.
By 2015, the situation was much improved by the addition of new water points, training of maintenance committees and scaling the use of micro meters. The E and F scores for water improved to 40% and 58%, the sanitation EF score improved to 53%:
Cascas SWPY2015 = 14,191 people * (40%*58% + 53%) * 10 years = 108,135 SWPY
The fourfold improvement in the SWPY score reflects a fourfold improvement for the people in Cascas, every resident has roughly a four times higher chance of having access to water and sanitation at any point in the next decade. Still, there’s a long way to go: a perfect and sustainable coverage of Cascas will achieve a score of 283,820 SWPY, Cascas is just over a third of the way there.
The huge jump in water access in Cascas did not happen by itself, but involved an investment by Water For People, the local government and the community:
We can calculate the effectiveness of investment in water and sanitation by dividing the total SWPYs gained by the total dollars invested:
EffectivenessWFP = (108,135–25,487) / $1,785,158 = .046 SWPY/$, or just over $20 to provide a person with a year’s water access!
In fact, the sparse population of Peru reduces the measured effectiveness of water charity since each fixed resource helps fewer people. For a sense of the scale let’s compare the effectiveness of providing each Peruvian with 6 bottles of mineral water per day for drinking and washing:
Effectivenessbottle = 1 / (365 days/year * 6 bottles/day * $3.99 $/bottle) = 0.00011 SWPY/$, it would cost $8,738 to provide someone with a year’s worth of mineral water.
Adjustments and total impact
The .046 SWPY/$ number we calculated is a first estimate. As donors who are interested in the direct impact of donating, we should adjust this estimate to account for the following facts:
- Access has been improving worldwide without the intervention of Water For People. Based on the UN’s Millenium Development Goals for water and sanitation(8), access to water and sanitation has been improving at 0.76% a year globally in the developing world. To be conservative, I assumed that in the absence of aid from WFP or any external sources water access would improve at double that rate: 1.5% annually.
- Not every dollar of donation goes to the consumers. Water For People spends 77.5% of expenses on direct program activities, the rest covers salaries, reporting, administration and fundraising. I divided the investment numbers by that percentage.
Here are the results for the 26 districts Water For People has been operating in, based on improvement and investment data from 2011–2015. I calculated the amount of sanitation and water person-years that can be given by a modest donation of $100:
The large variance in those numbers reflects varying conditions in each district. African towns are more densely populated and have a starting point of very low water availability, this amplifies the impact of water programs in Africa. The two districts in Honduras with negative numbers have received relatively small investments by WFP (6% of total) and reflect decreasing measures of access due to natural deterioration in water infrastructure (that Water For People is working to stem) and slight changes in measurement methodology (including more people in the “Everyone” measure). Since 2013, WFP has investment the majority of its money in Africa and India where it achieves much higher efficiency.
Caveats aside, our estimate is that a donation of $100 will help almost 23 people drink clean water / poop in dignity for a whole year. Helping a single person costs $4.37, barely more than a single bottle of Voss!
Cost of providing a SWPY in different regions of the world
How the measurement measures up
This is the point where I apologize for using two digits of precision on numbers that may only be correct within a couple orders of magnitude.
Here are some reasons the numbers could be too optimistic:
- The numbers are self-reported by Water For People and could be an overly optimistic measure of the ability to actually provide water access for 10 years (the Forever score).
- The scores are only measured for the available water points, the Everyone score may not include the entire district population.
- Future donations may not be used as effectively as the low hanging fruit is already captured.
There are also some ways in which the numbers could be understating the impact:
- Future donations may be used more effectively as Water For People scales up and learns from experience, in fact the effectiveness of WFP for 2013–2015 is much higher than that for 2011–2013.
- The experience gained by water charities over many years can show local governments how to improve and maintain water access without external aid.
Are there any “real life” measures to compare the $4.37/SWPY number to? The US spent $109 billion(9) total on water utilities, including water supply and wastewater treatment. Since every person in the US accounts for 2 SWPY (water + sanitation) annually, that amounts to $171/SWPY in the US. That number includes total public spending on water, rather than WFP’s activity which is “hooking up” underserved communities to an existing national water infrastructure maintained by the government and paid for by taxes (which are included in the $171 number). The US also has much higher labor costs and a higher standard for drinking water than in other countries. Comparing American total investment numbers to African access-creation numbers is like comparing apples to kiwano horned cucumbers(10), but $171/SWPY can be seen as a very conservative upper limit on measured effectiveness.
Water For People estimates that an external investment of $125 million will be enough to complete “Everyone Forever” to the 4 million people in the districts they are operating in. Bringing 4 million people from the current ~50% access (40 million SWPY) to 100% access for both water and sanitation (80 million SWPY) achieves an effectiveness of $125 million / 40 million SWPY = $3.13/SWPY ($31.3 per person), very close to my current calculation and even more optimistic.
Whether the numbers are accurate or overly optimistic, they are still very useful.
Bad numbers drive good decisions
There are two schools of thought regarding the use of approximate numbers. The first asserts “garbage in — garbage out” and refuses to deal with less than perfect data. Following this approach leaves one no reason to believe that buying people in Malawi bottles of Voss is any less efficient than what Water For People does. The second school, of which I’m an adherent, asserts that it is better to pull numbers out of one’s [behind] to make a decision than to pull the decision out of one’s behind(11). Once we have a number, even if it’s very approximate, we can see how it impacts our decisions such as the decision to donate.
Calculating a result of $4.37/SWPY tells me that it’s very possible that the actual cost of providing water access to people in the third world is $20/SWPY, but it’s quite unlikely that it’s $1,000/SWPY. What happens if I overestimated the impact by a factor of 4, and it actually costs $18 to help a person for a year?
Americans spend $11.8 Billion a year on bottled water alone(12). If they drank tap water instead and donated the difference to water charities, an efficiency of $18/WPY would be enough to provide water for every single person of the 663,000,000 people that lack it.
$18/SWPY isn’t guaranteed, but it is not unreasonably optimistic.
Even if the numbers aren’t exact, they can be used to assess if Water For People is getting better or worse at its mission in future years and more importantly, to compare it to other charities that operate in the same field. Finally, the numbers can even be used to compare charities across different sectors. According to GiveWell(13), the disparity in charity effectiveness can easily reach a factor of 1,000 or more. Against this background, calculating impact to within an order of magnitude can still differentiate effective charities from the ineffective ones.
Is providing clean water to a single person for a year worth $4 of your money? $18? That is for you to decide. Our job at Agora for Good is to provide you with the tools and context to make that decision, as well as recognizing top organizations like Water For People that succeed not only in providing a critical service but are also dedicated to robust measurement and reporting. Like a cup of clean water, the answers can be found with a little bit of help.
Want to learn more?