Do Households’ Water and Sanitation Choices Really Matter for Child Health?

This paper investigates the impact of usage patterns of water and sanitation on the health of children in Ethiopia, once supply side factors are controlled for. A comprehensive set of controls is employed to account for individual heterogeneity driven by time-invariant unobservables, time-invariant and time-variant observables. The results from the pooled cross-section estimated by OLS suggest that there is a strong relationship between water and sanitation choices of a household and a child's weight-for-age z-scores. This correlation disappears when unobserved time-invariant fixed effects are removed through a fixed effects specification. However, the fixed effects model reveals that children from the poorest families who improved usage patterns of water and sanitation exhibited a significantly larger growth in weight-for-age z-scores between the two periods. The effect remains robust across a number of different specifications, including a dynamic model to allow for catch-up effects and an instrumented version of a dynamic model. Consequently, the effectiveness of investments in water and sanitation infrastructure can be leveraged by influencing the choices made by households regarding the type of water and sanitation.