On Estimating Benefit-Cost Ratios for Water Supply Investments

Abstract

Traditionally, public health programs have been viewed as unsusceptible to quantification by the standard techniques of benefit-cost (B/C) analysis. The authors, however, have developed a methodology - specifically for municipal water supplies but probably also applicable to other public health endeavors - which should provide a foundation for future fund allocation decisions. Puerto Rico was selected as an example to illustrate the methodology and establish the order of magnitude of the B/C ratio. This ratio was less than unity for the first 10 years of the water-supply-system life and subsequently increased to 2.5 near the end of the useful system life.