Econometric estimation of deprivation cost functions: A contingent valuation experiment

Abstract This paper details research to design an estimation process for Deprivation Cost Functions (DCF) using Contingent Valuation, and to apply it econometrically to obtain a DCF for drinkable water. The paper describes both the process and results obtained. The results indicate that deprivation costs for drinkable water have a non-linear relation with deprivation times. The estimated DCFs provide a consistent metric that could be incorporated into humanitarian logistic mathematical models, eliminating the need to use proxy metrics, and providing a better way to assess the impacts of delivery options and actions. The research reported in this paper is the first attempt in the literature to produce estimates of the economic value of human suffering created by the deprivation of a critical supply or service.

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