Bundling of Basic Public Services and Household Welfare in Developing Countries: An Empirical Exploration for the Case of Peru

Using panel data for Peru for the period 1994-2000, we found that increases in household welfare, as measured by changes in consumption, are larger when households receive two or more services jointly than when services are provided separately. Such increases appear to be more than proportional, as F-tests on the coefficients of the corresponding regressors confirm. Thus, we found that bundling of services may help realize welfare effects. This finding is particularly robust in the case of urban areas.