International Water Contracts and Household Outcomes: Evidence from Albania

Justin May and Andrews Bacher-Hicks ()

No 83, Working Papers from Department of Economics, College of William and Mary

Abstract: In mid-2003, four of 36 Albanian political districts entered into management contracts with Berlinwasser International AG for the provision of water supply. Using 2002 and 2005 data from the World Bank's Living Standards Measurement Study for Albania, we assess the results of this contracting out of supply on various household outcomes including continuity of water supply, hours per day of water availability, water price, water source, water quality, and incidence of diarrhea. Using a difference-in-difference approach and controlling for a variety of household characteristics, our results suggest that consumers in contracted districts experience no significant change in hours per day of service though privatization comes with average price increases of 13-17 percent. In a multinomial logit framework, we find that consumers in contracted districts are significantly less likely to use water from an outdoor tap, a public tap, or a spring/well but far more likely to report obtaining water by truck. Households receiving piped water in contracted districts are 29 percentage points more likely to report their subjective water quality as "unsuitable for drinking", though estimates suggest no significant change in the incidence of diarrhea in contracted districts.

Keywords: Albania; household; management contract; privatization; water supply (search for similar items in EconPapers)
JEL-codes: H51 L33 O12 O13 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2009-03-30
New Economics Papers: this item is included in nep-agr
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