Down with diarrhea - Using fuzzy Regression Discontinuity Design to link communal water supply with health

This paper contributes to the existing literature by demonstrating that the provision of communal water supply can be effective in improving child health if the targeted population shows adequate hygiene awareness and behavior. Until now, the fast growing body of literature on water development interventions could not establish a significant effect of communal water supply on health. The insignificant health effect regarding communal water supply (in contrast to other types of water interventions) found in meta-studies may be explained by recontamination of the water between the source and the point of use; and by the lack of studies which address the mode of selection into treatment of water programs which may result in biased estimates. To identify the health effect of communal water supply, a fuzzy Regression Discontinuity Design set-up is applied using an eligibility criterion as source of exogenous variation. The paper also provides practical insights in a little explored extension of the fuzzy Regression Discontinuity Design which may have great relevance for applied research. As occurs often in practice, the forcing variable determining treatment could not be directly observed. For this reason, a slightly noisy measure was reconstructed. To convince the critical reader of the validity of this approach, a variety of robustness checks are carried out and the results are cross-validated through two additional identification strategies - a village fixed effects and an instrumental variable approach.