The benefits and costs of environmental health interventions

A major theme of my research is a desire to understand the extent to which: a) people actually understand (or believe) the benefits of environmental health improvements and make rational decisions; b) private provision of these goods and services can actually work to achieve their widespread adoption and use; and c) public sector or outside intervention is needed and/or justified (on the grounds of external effects or other sorts of market failures). To address these sorts of issues, I rely heavily on the rigorous application of benefit-cost analysis. I have argued in several papers that a policy dialogue that is grounded in welfare-theoretic principles and willingness-to-pay (i.e., demand) for improvements is more useful than the rather ad-hoc application of cost effectiveness criteria.

With Dale Whittington, Subhrendu Pattanayak, and others, I have also used simulation methods to demonstrate that benefit-cost outcomes for environmental health interventions geared at addressing developing country problems are highly variable across targeted locations, and that using simple metrics to rank interventions across sectors is nearly impossible. In addition, researchers often overstate the generalizability of the findings from a few rigorous research studies and underestimate the degree to which dynamic conditions threaten their conclusions.

Main research collaborators:

  • Dale Whittington; David Fuente; Maura Allaire (UNC-Chapel Hill)
  • Semra Ozdemir (Duke-NUS)
  • Michael Hanemann (Arizona State University)
  • Subhrendu Pattanayak (Duke)
  • Joe Cook (University of Washington).

Related Publications:

Hanemann, M.; M. Jeuland; K. Downs; D. Whittington (2014). “Estimating the Global Health Damages from Climate Change in an Integrated Assessment Model: The Problems of Scale and Aggregation.” In preparation.

Jeuland, M.; S. Ozdemir; D. Fuente;   M. Allaire; D. Whittington (2013). “The long-term dynamics of health benefits from improved water and sanitation in developing countries.” PLoS ONE 8(10): e74804. doi: 10.1371/journal.pone.0074804.

Abstract: The problem of inadequate access to water, sanitation and hygiene (WASH) in less-developed nations has received much attention over the last several decades (most recently in the Millennium Development Goals), largely because diseases associated with such conditions contribute substantially to mortality in poor countries. We present country-level projections for WASH coverage and for WASH-related mortality in developing regions over a long time horizon (1975–2050) and provide dynamic estimates of the economic value of potential reductions in this WASH-related mortality, which go beyond the static results found in previous work. Over the historical period leading up to the present, our analysis shows steady and substantial improvements in WASH coverage and declining mortality rates across many developing regions, namely East Asia and the Pacific, Latin America and the Caribbean, Eastern Europe and the Middle East. The economic value of potential health gains from eliminating mortality attributable to poor water and sanitation has decreased substantially, and in the future will therefore be modest in these regions. Where WASH-related deaths remain high (in parts of South Asia and much of Sub-Saharan Africa), if current trends continue, it will be several decades before economic development and investments in improved water and sanitation will result in the capture of these economic benefits. The fact that health losses will likely remain high in these two regions over the medium term suggests that accelerated efforts are needed to improve access to water and sanitation, though the costs and benefits of such efforts in specific locations should be carefully assessed.

Whittington, D.; M. Jeuland; K. Barker, Y. Yuen (2012). “Setting Priorities and, Targeting Subsidies among Water, Sanitation, Hygiene and Preventive Health Interventions in Developing Countries.” World Development 40(8): 1546–1568.

Abstract: The paper challenges the conventional wisdom that water and sanitation improvements and other preventive health interventions are always a wise economic investment. Costs and benefits are presented for six water, sanitation, and health programs—handwashing, sanitation, point-of-use filtration and chlorination, insecticide-treated bed nets, and cholera vaccination. Model parameters are specified for a range of conditions that are plausible for locations in developing countries. We find that the parameter values needed for such cost–benefit calculations are not available for setting global priorities. We reflect on the implications of our findings for more “evidence-based” planning of public health and development interventions.

Jeuland, M.; S. Pattanayak (2012). “Benefits and costs of improved cookstoves: Assessing the implications of variability in health, forest and climate impactsPLOS One 7(2): e30338. doi:10.1371/journal.pone.0030338.

Abstract: Current attention to improved cook stoves (ICS) focuses on the ‘‘triple benefits’’ they provide, in improved health and time savings for households, in preservation of forests and associated ecosystem services, and in reducing emissions that contribute to global climate change. Despite the purported economic benefits of such technologies, however, progress in achieving large-scale adoption and use has been remarkably slow. This paper uses Monte Carlo simulation analysis to evaluate the claim that households will always reap positive and large benefits from the use of such technologies. Our analysis allows for better understanding of the variability in economic costs and benefits of ICS use in developing countries, which depend on unknown combinations of numerous uncertain parameters. The model results suggest that the private net benefits of ICS will sometimes be negative, and in many instances highly so. Moreover, carbon financing and social subsidies may help enhance incentives to adopt, but will not always be appropriate. The costs and benefits of these technologies are most affected by their relative fuel costs, time and fuel use efficiencies, the incidence and cost-of-illness of acute respiratory illness, and the cost of household cooking time. Combining these results with the fact that households often find these technologies to be inconvenient or culturally inappropriate leads us to understand why uptake has been disappointing. Given the current attention to the scale up of ICS, this analysis is timely and important for highlighting some of the challenges for global efforts to promote ICS.

Cook, J.; M. Jeuland; B. Maskery; D. Whittington (2011). “Giving stated preference respondents “time to think”: results from four countries.” Environmental and Resource Economics 51(4): 473-496. doi 10.1007/s10640-011-9508-4.

Abstract: Previous studies have found that contingent valuation (CV) respondents who are given overnight to reflect on a CV scenario have 30–40% lower average willingness-to-pay (WTP) than respondents who are interviewed in a single session. This “time to think” (TTT) effect could explain much of the gap between real and hypothetical WTP observed in experimental studies. Yet giving time to think is still rare in binary or multinomial discrete choice studies. We review the literature on increasing survey respondents’ opportunities to reflect on their answers and synthesize results from parallel TTT studies on private vaccine demand in four countries. Across all four countries, we find robust and consistent evidence
from both raw data and multivariate models for a TTT effect: giving respondents overnight to think reduced the probability that a respondent said he or she would buy the hypothetical vaccines. Average WTP fell approximately 40%. Respondents with time to think were also more certain of their answers, and a majority said they used the opportunity to consult with their spouse or family. We conclude with a discussion of why researchers might be hesitant to adopt the TTT methodology.

Whittington, D.; W.M. Hanemann; C. Sadoff; M. Jeuland. (2009). “The Challenge of Improving Water and Sanitation Services in Less Developed Countries.” Foundations and Trends in Microeconomics 4 (6): 469-607.

Abstract: This paper argues that there are many challenges to designing and implementing water and sanitation interventions that actually deliver economic benefits to the households in developing countries. Perhaps most critical to successful water and sanitation investments is to discover and implement forms of service and payment mechanisms that will render the improvements worthwhile for those who must pay for them. In this paper, we argue that, in many cases, the conventional network technologies of water supply and sanitation will fail this test, and that poor households need alternative, non-network technologies. However, it will not necessarily be the case that specific non-network improved water supply and/or sanitation technologies will always be seen as worthwhile by those who must pay for them. We argue that there is no easy panacea to resolve this situation. For any intervention, the outcome is likely to be context-dependent. An intervention that works well in one locality may fail miserably in another. For any given technology, the outcome will depend on economic and social conditions, including how it is implemented, by whom, and often on the extent to which complementary behavioral, institutional and organizational changes also occur. For this reason, we warn against excessive generalization: one cannot, in our view, say that one intervention yields a rate of return of x% while another yields a return of y%, because the economic returns are likely to vary with local circumstances. More important is to identify the circumstances under which an intervention is more or less likely to succeed. Also for this reason, when we analyze a few selected water and sanitation interventions, we employ a probabilistic rather than a deterministic analysis to emphasize that real world outcomes are likely to vary substantially.

Jeuland, M.; M. Lucas; J. Clemens; D. Whittington (2009). “A Cost Benefit Analysis of Vaccination Programs in Beira, Mozambique.” World Bank Economic Review 23 (2):235-267.

Abstract: Economic and epidemiological data collected in Beira, Mozambique, are used to conduct this first social cost–benefit analysis for cholera vaccination in Sub-Saharan Africa. The analysis compares the net economic benefits of three immunization strategies with and without user fees: school-based vaccination for school children only (age 5–14), school-based vaccination for all children (age 1–14), and a mass vaccination campaign for all people older than one year. All options assume the use of a low-cost new-generation oral cholera vaccine. The analysis incorporates the latest knowledge of vaccine effectiveness, including new evidence on the positive externality associated with the resulting herd protection (both protection of unvaccinated individuals and enhanced protection among vaccinated individuals arising from vaccination of a portion of the population). It also uses field data for incidence, benefits (private willingness to pay, public cost of illness), and costs (production, shipping, delivery, private travel costs). Taking herd protection into account has important economic implications. For a wide variety of parameters values, vaccination programs in Beira pass a cost–benefit test. Small school-based programs with and without user fees are very likely to provide net benefits. A mass vaccination campaign without user fees would result in the greatest reduction in the disease burden, but the social costs would likely outweigh the benefits, and such a program would require substantial public sector investment. As user fees increase, mass vaccination becomes much more attractive, and the reduction in disease burden remains above 70 percent at relatively low user fees.

Jeuland, M.; D. Whittington (2009). “Cost-benefit comparisons of investments in improved water supply and cholera vaccination programs.” Vaccine 27 (23):3109-3120.

Abstract: This paper presents the first cost–benefit comparison of improved water supply investments and cholera vaccination programs. Specifically, we compare two water supply interventions – deep wells with public hand pumps and biosand filters (an in-house, point-of-use water treatment technology) – with two types of cholera immunization programs with new-generation vaccines – general community-based and targeted and school-based programs. In addition to these four stand-alone investments, we also analyze five combinations of water and vaccine interventions: (1) borehole + hand pump and community-based cholera vaccination, (2) borehole + handpump and school-based cholera vaccination, (3) biosand filter and community-based cholera vaccination, (4) biosand filter and school-based cholera vaccination, and (5) biosand filter and borehole + hand pump. Using recent data applicable to developing country locations for parameters such as disease incidence, the effectiveness of vaccine andwater supply interventions against diarrheal diseases, and the value of a statistical life,we construct cost–benefit models for evaluating these interventions. We then employ probabilistic sensitivity analysis to estimate a frequency distribution of benefit–cost ratios for all four interventions, given a wide variety of possible parameter combinations. Our results demonstrate that there are many plausible conditions in developing countries under which these interventions will be attractive, but that the two improved water supply interventions and the targeted cholera vaccination program are much more likely to yield attractive cost–benefit outcomes than a community-based vaccination program. We show that implementing community-based cholera vaccination programs after borehole + handpump or biosand filters have already been installed will rarely be justified. This is especially true when the biosand filters are already in place, because these achieve substantial cholera risk reductions on their own. On the other hand, implementing school-based cholera vaccination programs after the installation of boreholes with handpump is more likely to be economically attractive. Also, if policymakers were to first invest in cholera vaccinations, then subsequently investing in water interventions is still likely to yield positive economic outcomes. This is because point-of-use water treatment delivers health benefits other than reduced cholera, and deep boreholes + hand pumps often yield non-health benefits such as time savings.
However, cholera vaccination programs are much cheaper than the water supply interventions on a
household basis. Donors and governments with limited budgets may thus determine that cholera vaccination programs are more equitable than water supply interventions because more people can receive benefits with a given budget. Practical considerations may also favor cholera vaccination programs in the densely crowded slums of South Asian and African cities where there may be insufficient space in housing units for some point-of-use technologies, and where non-networked water supply options are limited.

Davis, J.; H. Lukacs; M. Jeuland; A. Alvestegui; B. Soto; G. Lizarraga; A. Bakalian (2008). “Sustaining the benefits of rural water supply investments: Experience from Cochabamba and Chuquisaca, Bolivia.” Water Resources Research 44: doi:10.1029/2007WR006550.

Abstract: Many rural water supply interventions in developing countries have been marked by a poor record of sustainability. Considerable progress has been made over the past several decades on the development of lower-cost technologies that are easier for communities in developing countries to maintain and also on improving project design and implementation to enhance sustainability of outcomes. Less attention has been given to the necessary and sufficient supports for water system maintenance in the post-construction period. This study explores the contribution of various types of postconstruction support (PCS) to the sustainability of rural water supply systems in Bolivia. Using regression and matched pair statistical analyses, the effects of PCS on water system performance and user satisfaction with service are modeled. Communities that received management-oriented PCS visits from external agencies, and those whose system operators attended training workshops, had better performing systems than communities that received no such support. Engineering-oriented PCS visits to communities had no
measurable impact on system functioning or user satisfaction.

Cook, J.; M. Jeuland; B. Maskery; D. Lauria; D. Sur; J. Clemens; D. Whittington (2008). “Using private demand studies to calculate socially optimal vaccine subsidies in developing countries.” Journal of Policy Analysis and Management 28 (1): 6-28.

Abstract: Although it is well known that vaccines against many infectious diseases confer positive economic externalities via indirect protection, analysts have typically ignored possible herd protection effects in policy analyses of vaccination programs. Despite a growing literature on the economic theory of vaccine externalities and several innovative mathematical modeling approaches, there have been almost no empirical applications.
The first objective of the paper is to develop a transparent, accessible economic framework for assessing the private and social economic benefits of vaccination. We also describe how stated preference studies (for example, contingent valuation and choice modeling) can be useful sources of economic data for this analytic framework. We demonstrate socially optimal policies using a graphical approach, starting with a standard textbook depiction of Pigouvian subsidies applied to herd protection from vaccination programs. We also describe nonstandard depictions that highlight some counterintuitive implications of herd protection that we feel are not commonly understood in the applied policy literature.
We illustrate the approach using economic and epidemiological data from two neighborhoods in Kolkata, India. We use recently published epidemiological data on the indirect effects of cholera vaccination in Matlab, Bangladesh (Ali et al., 2005) for fitting a simple mathematical model of how protection changes with vaccine coverage. We use new data on costs and private demand for cholera vaccines in Kolkata, India, and approximate the optimal Pigouvian subsidy. We find that if the optimal subsidy is unknown, selling vaccines at full marginal cost may, under some circumstances, be a preferable second-best option to providing them for free.

Cook, J.; M. Jeuland; D. Whittington; C. Poulos; J. Clemens; D. Sur; D.D. Anh; M. Agtini; Z. Bhutta; DOMI Typhoid Economics Study Group (2008). “The cost-effectiveness of typhoid Vi vaccination programs: Calculations for four urban sites in four Asian countries.” Vaccine 26 (50): 6305-6316.

Abstract: The burden of typhoid fever remains high in impoverished settings, and increasing antibiotic resistance is making treatment costly. One strategy for reducing the typhoid morbidity and mortality is vaccination with the Vi polysaccharide vaccine.We use awealth of neweconomic and epidemiological data to evaluate the cost-effectiveness of Vi vaccination against typhoid in sites in four Asian cities: Kolkata (India), Karachi (Pakistan), North Jakarta (Indonesia), and Hue (Vietnam). We report results from both a societal as well as a public sector financial perspective.
Baseline disease burden estimates in the four areas are: 750 cases per year in two Kolkata neighborhoods (pop 185,000); 84 cases per year in the city of Hue (pop 280,000); 298 cases per year in two sub-districts in North Jakarta (pop 161,000), and 538 cases per year in three squatter settlements in Karachi (pop 102,000). We estimate that a vaccination program targeting all children (2–14.9) would prevent 456, 158, and 258 typhoid cases (and 4.6, 1.6, and 2.6 deaths), and avert 126, 44, and 72 disability-adjusted life years (DALYs) over 3 years in Kolkata, North Jakarta and Karachi, respectively. The net social costs would be US$160 and US$549, per DALY averted in Kolkata and North Jakarta, respectively. These programs, along with a similar program in Karachi, would be considered “very cost-effective” (e.g. costs per DALY averted less than per capita gross national income (GNI)) under a wide range of assumptions. Community-based vaccination programs that also target adults in Kolkata and Jakarta are less cost-effective because incidence is lower in adults than children, but are also likely to be “very cost-effective”. A program targeting school-aged children in Hue, Vietnam would prevent 21 cases, avert 6 DALYs, and not be cost-effective (US$3779 per DALY averted) because of the low typhoid incidence there.