Health Benefits of Clean Water, Sanitation and Hygiene: The Role of Public Expenditure

Water, sanitation and hygiene (WASH) are now accepted as three critical determinants of the health of individuals. Using a state-year panel for India from 2011 to 2019, we estimate two-way fixed-effects models with a distributed-lag structure to assess the relationship between public WASH expenditure and disability-adjusted life years (DALYs) from diarrhoeal disease. The results show that a dedicated expenditure on WASH facilities reduces the DALYs associated with diarrhoea. Specifically, the elasticity of public expenditure on WASH is −0.065, indicating that a 10% increase in WASH expenditure leads to a 0.65% decline in DALYs associated with diarrhoea. The findings highlight that one immediate step of addressing the burden of diarrhoeal disease would be to invest significantly more on WASH intervention. JEL Codes: H51, I18, I31, I38