Economic Feasibility Study for Improving Drinking Water Quality: A Case Study of Arsenic Contamination in Rural Argentina

Abstract

Economic studies are essential in evaluating the potential external investment support and/or internal tariffs available to improve drinking water quality. Cost-benefit analysis (CBA) is a useful tool to assess the economic feasibility of such interventions, i.e. to take some form of action to improve the drinking water quality. CBA should involve the market and non-market effects associated with the intervention. An economic framework was proposed in this study, which estimated the health avoided costs and the environmental benefits for the net present value of reducing the pollutant concentrations in drinking water. We conducted an empirical application to assess the economic feasibility of removing arsenic from water in a rural area of Argentina. Four small-scale methods were evaluated in our study. The results indicated that the inclusion of non-market benefits was integral to supporting investment projects. In addition, the application of the proposed framework will provide water authorities with more complete information for the decision-making process.

Assessing the Potential of Improving Livelihoods and Creating Sustainable Socio-Economic Circumstances for Rural Communities in Upper Egypt

“…Many empirical analyses have assessed the worth of agricultural investments by conducting comparisons of the costs and benefits involved. A cost-benefit analysis (CBA) is commonly used to study the economic feasibility of significant interventions [53], i.e., to improve agricultural practices by relying on conservation practices and good agricultural practices (GAP). A CBA is a useful method for analyzing the socio-economic perspective of a current situation and then comparing the results with a prospective initiative aimed at improving community welfare [54].…”

“…Basically, through a CBA, we can conduct a comparative analysis of the current state-of-the-art and the projected value that could be generated by certain proposed activities. Therefore, a CBA is a method that assesses whether an initiative's investors are using their resources efficiently and the potential scenarios of using these resources more efficiently [53].…”

“…A group of studies have also used CBAs to measure the economic consequence of intervention projects focused on water programs [53,[65][66][67][68][69]. Work by Locatelli et al [70] assesses the economic impact of green infrastructure (GI) using a CBA that includes several benefits related to urban drainage in the Spanish cities of Barcelona and Badalona.…”