Spring Cleaning : Rural Water Impacts , Valuation , and Institutions *

Social norms and legal institutions often create common property rights in natural resources, limiting private investment. A randomized evaluation in Kenya suggests that infrastructure investments can reduce fecal contamination by 66% at naturally occurring springs and 24% in spring users’ home water supply, cutting child diarrhea by one quarter. While households increase use of protected springs, travel-cost based revealed preference estimates of households’ valuations are only one-third stated preference valuations and are less than one-tenth levels implied by health planners’ typical valuations of child mortality. Simulations suggest that, as a result, private property norms would generate little additional investment, while imposing large static costs due to spring owners’ local market power. However, social norms requiring continued open access to unimproved sources but allowing fees for protected spring water could be Pareto improving. Vouchers for improved water could closely approximate either a conventional social planner solution or one placing extra value on child health. * This research is supported by the Hewlett Foundation, USDA/Foreign Agricultural Service, International Child Support (ICS), Swedish International Development Agency, Finnish Fund for Local Cooperation in Kenya, google.org, the Bill and Melinda Gates Foundation, and the Sustainability Science Initiative at the Harvard Center for International Developement. We thank Alicia Bannon, Jeff Berens, Lorenzo Casaburi, Carmem Domingues, Willa Friedman, Francois Gerard, Anne Healy, Jonas Hjort, Jie Ma, Owen Ozier, Camille Pannu, Eric Van Dusen, Melanie Wasserman, Heidi Williams and especially Clair Null and Changcheng Song for excellent research assistance, and thank the field staff, especially Polycarp Waswa and Leonard Bukeke. Jack Colford, Alain de Janvry, Esther Duflo, Liran Einav, Andrew Foster, Michael Greenstone, Avner Greif, Michael Hanemann, Danson Irungu, Ethan Ligon, Steve Luby, Enrico Moretti, Kara Nelson, Aviv Nevo, Sheila Olmstead, Ariel Pakes, Judy Peterson, Rob Quick, Mark Rosenzweig, Elisabeth Sadoulet, Sandra Spence, Duncan Thomas, Ken Train, Chris Udry, and numerous seminar participants have provided helpful comments. Sandra Spence gave key guidance on water quality testing. All errors are our own. -Corresponding author: Edward Miguel (emiguel@econ.berkeley.edu).