Rational Thirst: Household Water Decisions in Rural India

This study examines household demand for drinking water in rural central India using a revealed preference framework applied to a stratified sample of households across villages with and without piped water supply. Departing from the contingent valuation methods prevalent in earlier literature, the study employs a discrete choice model to identify the determinants of water source selection. In settlements without piped supply, distance to the water source and female educational attainment emerge as the principal determinants of safe water preference, whilst household income is not significant. Where piped supply exists, income, price, and household size shape the decision to opt for a private yard connection. The monetary value of time spent collecting water indicates a substantial willingness to pay. The findings demonstrate that rural households already behave as rational economic agents in their water decisions, undermining paternalistic assumptions embedded in India's supply-driven policy framework. The paper argues for a tiered service model that guarantees a minimum standard of provision for all whilst permitting enhanced service levels for those willing and able to pay, thereby reconciling equity commitments with financial sustainability.