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Benefit-cost Ratios for
Sanitation Investments

The economic return on sanitation investments is very high. A common measure of this is the benefit-cost ratio (the value of the benefits in $ divided by the costs); if this is >1 then it's a worthwhile investment. Three good reports:

1.  Meeting the Water and Sanitation Millennium Development Goal (ERM for DFID, 2005)
− in the 12 countries studied (Ethiopia, Ghana, Nigeria, Uganda, South Africa, Tanzania, Zambia, Bangladesh, China, India, Cambodia and Sri Lanka) the benefit-cost ratios for sanitation investments were in the range 5−23.

2.  Economic and Health Effects of Increasing Coverage of Low-Cost Water and Sanitation Interventions (WHO & STI, background paper for HDR 2006; also available from WHO here)
− benefit-cost ratios for water investments, sanitation investments, and water and sanitation investments for selected 15 countries not on track to meet the MDG water target and/or the MDG sanitation target for meeting the MDG target and for universal coverage (i.e., water and/or sanitation for everyone) were found to be (Table 23, page 44):

Table of benefit-cost ratios for water and sanitation investments

The benefit-cost ratios for sanitation investments are in the range 1.6−13 for investments to meet the MDG sanitation target, and about the same for those to meet the universal coverage target, and − most importantly − they’re all higher than the corresponding benefit-cost ratio for water.

3.  Sanitation and Economic Development: Making the Case for the MDG Orphan (WaterAid & UCLA, 2007) − a well-presented and easy to read report which draws mainly on #2 above.

See also:

Guide to Understanding Costs and Benefits of Water Interventions (draft, WHO, 2008)