Water-Adjusted Person Years – Quantifying the Value of Water for People’s Quality of Life in Cost-Benefit Analysis

Household water insecurity harms quality of life outcomes beyond health, for example the disutility of worrying about water availability or anger at disrupted plans. However, these outcomes are excluded from cost-benefit analyses of water supply interventions, which typically measure and value only prevented disease and time savings. Misallocation of the US$ 35 billion invested annually in water supply in low- and middle-income countries may result. In this paper, I propose a way forward for quantifying the value of water for people’s quality of life, the ‘water-adjusted person year’ (WAPY), inspired by the quality-adjusted life year widely-used in health economics. Valuation of WAPYs is possible due to recent measurement innovation, such as the household water insecurity experiences (HWISE) scales. HWISE data can be used to derive an index of water-related quality of life anchored at 0 (“completely water insecure”) and 1 (“completely water secure”), using preference elicitation methods common in health economic evaluation. The resulting index can be used to weight WAPYs, with one WAPY representing a year lived in complete water security. The monetary value of WAPYs gained from an intervention, estimated based on willingness to pay, can be summed with other outcomes in cost-benefit analysis. Using WAPYs to improve investment decisions would help maximise welfare gains from constrained budgets