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Is a toilet a worthwhile investment? Views from India and Nigeria

Newsletter Article

In addition to its importance for public and private health, safe sanitation benefits individual households in a number of ways, including time savings, comfort, greater safety and increased status. In light of these personal gains as well as the enormous investment necessary to meet the United Nations’ target of eliminating open defecation by 2025, many sanitation programmes aim for households themselves to invest in the construction of a toilet.

Toilet block

In surveys conducted as part of three sanitation impact evaluation studies in India and Nigeria, researchers at the Institute for Fiscal Studies (IFS) have asked over 7,000 households why they do not own a toilet. The overwhelming majority (>80%) state that toilets are too expensive. In a recent policy note, additional detailed data on sanitation beliefs and practices have been analysed with the aim of understanding whether this statement is driven by misperceptions of costs and returns or by households being liquidity constrained. Such an understanding is important for the design of sanitation interventions. If the cost of toilets is seen as appropriate given the expected returns (i.e. households would be willing to invest if they were able to), then policy makers and development agencies should focus on interventions that alleviate liquidity constraints. However, if households underestimate returns and/or overestimate costs, any intervention that aims at inducing sanitation uptake should provide households with information on the actual costs and benefits.

The data provide compelling evidence that liquidity constraints for private latrine investments are substantial and binding. Any sanitation intervention that aims at increasing household sanitation coverage therefore needs to address such financial barriers. Although the data also suggest that households have a fairly accurate understanding of the investment costs and benefits, on average, many households continue to place a fairly low priority on sanitation investment. This implies that information provision should accompany interventions aimed at alleviating financial constraints.

The IFS is currently conducting two impact evaluations of sanitation interventions that tackle both informational and financial barriers but use different approaches. In India, the evaluation is designed to shed light on the differential uptake of private household sanitation when sanitation micro-credit is provided and when this credit is combined with a sequence of ‘soft activities’ aimed at informing and influencing potential customers. In Nigeria, the implementing partner combines the popular soft approach of Community-Led Total Sanitation (CLTS) , which focuses on triggering a change in sanitation behaviour through community participation events (and associated social pressure), with sanitation marketing. This is a more commercial approach, which more directly addresses both the demand and supply of sanitation. The first results of both of these studies are expected to be available in around one year’s time.

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This policy paper was presented at the EDePo 'Improving productivity in developing countries: identifying bottlenecks and obstacles to productive investments and technology adoption' conference held at Goodenough College on the 8th and 9th July 2015.
Newspaper article
In November last year, Nigeria declared that its water supply, sanitation and hygiene sector was in crisis. A community-level intervention aims to reduce open defecation and improve toilet coverage. So why does it work in some places and not others?