research institute for compassionate economics

Poop for sale

Written by Dean Spears on June 9th, 2012

Diane and I are glad to be back in India – where it is hot – and Avinash will be joining us in just a few days. I started the week in Seattle seeing old friends and making new friends at a conference for the Gates Foundation’s Water, Sanitation and Hygiene program.

We’re on the move again, so I haven’t been blogging as much, but at the conference I heard many great ideas about improving sanitation that I wanted to share. One group is designing and testing an electronic box that can verify whether people go in their latrines. Another is trying to understand the market for latrine pumping in peri-urban areas: like the trucks that come to Diane’s family’s septic tanks, in these high population density settings somebody has to eventually take it away. A third group is working with a city government to randomize community sanitation complexes.

But one of the ideas I’ve been thinking about most is a perfectly Economist idea my friend Raymond Guiteras mentioned at lunch: buy people’s poop. If somebody stood ready to buy stools, everyone would have a financial incentive to put in in a safe place. Economists call this “internalizing the externality” and think about ways to make similar incentives apply to other social problems (often through taxes or subsidies).

Now, there are some important practical difficulties here, not least how we could keep people from diluting the product with water, for example. Alternatively, we could pay people for coming to the sanitation complex, but privacy and verification problems interact there, too. But silly notions sometimes lead to good ideas, and if nothing else Raymond’s suggestion dramatizes the externality at the heart of the problem. Thoughts?