D. Affordability calculation

144. Affordability analysis, using existing expenditure on water and sanitation. Expenditure for water and wastewater services are reported in some household surveys, as shown in Table 14, above. Other household surveys (EU SILC and most of the HBSs) report these expenditures together with other utility expenditure or rental costs. Subsequently, the share of these expenditures in total income was computed and compared to benchmarks (that is, 5 percent, 3 percent) commonly applied to assess affordability (as outlined in more detail in Fankhauser and Tepic as in 2005). Since some households did not respond to this question, and since the sample size for persons living on $2.50 a day PPP is already small, estimates with too few observations and corresponding large standard errors were not reported.

145. Affordability analysis, using assumed minimum water consumption and average tariff, as collected through SoS data collection. Using a potential minimum water consumption of 100 liters per capita per day and average tariff for water and wastewater collection, the average expenditure per person was calculated for each household, taking into consideration household size, and computed as share in total income, estimated from the household surveys. This scenario assumes that all households would be covered with public water and wastewater services in the country under equal conditions and without taking into consideration differences in price and income elasticities. This hypothetical scenario provides an upper benchmark of potential affordability constraints, should full coverage of services be pursued.