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What this is: Value of information BOTEC for Development Innovation Lab (DIL) RCT of vouchers for water chlorination. Key parameters are in light blue.
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CostsValueNotes
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Cost of the evaluation (millions)$11Rough guess
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Cost-effectiveness (CE) of water chlorination interventionsValueNot used in calculations; for interpretation only
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Average CE of Dispensers for Safe Water (DSW) (x cash)10.8Average of rough CE estimates across countries where water chlorination CE is above ~6x cash
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Average CE of in-line water chlorination (ILC) (x cash)13.6Average of rough CE estimates across countries where water chlorination CE is above ~6x cash
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Average CE of vouchers (x cash)19.9Average of rough CE estimates across countries where water chlorination CE is above ~6x cash
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Overall CE of water chlorination interventions we might fund (x cash)13.8For the overall average, we place a 50% weight on the cost-effectiveness of water chlorination via Dispensers for Safe Water (DSW), compared to 25% weight for the other two interventions, since the implementation infrastructure is already in place for DSW and thus that program may be easier to scale. For more information on DSW, see this page.
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Basic parametersValue
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How long we would fund DSW and other water chlorination interventions if they met our bar (years)10Guess. Using similar value to other value of information BOTECs.
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Cost-effectiveness of counterfactual opportunity (x cash)10Guess. Expected cost-effectiveness of counterfactual use of funds in 2025.
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Units of value generated per philanthropic dollar spent, GiveDirectly0.00335Top charities cost-effectiveness analysis
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Discount rate for opportunities getting worse over time5%This assumes that the cost-effectiveness of opportunities decays over a 10-year period. Using similar value to other value of information BOTECs.
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Effect of vouchers evaluation on cost-effectiveness estimates
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ValueNotes
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Scenario 0: No evaluation
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Annual funding to water chlorination interventions (millions)$46Guess. If we didn't fund the evaluation, we would use our current best guess of cost-effectiveness and recommend funding to areas that are above the cost-effectiveness of counterfactual programs we might recommend funding (our current bar for recommending funding is 10x cash).
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Best guess on average CE of water chlorination interventions under this scenario (x cash)10Conservative guess, see cell B10. We use a lower value than the 13.8x cash calculated in cell B10 to account for uncertainty in that estimate and to avoid overstating the cost-effectiveness of the RCT.
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Scenario 1: Negative update on CE (Opportunities estimated to be 10x-13x cash are now below our bar of 10x cash)
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Probability of scenario (assuming we fund the evaluation)33%Guess
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Change in annual funding to water chlorination interventions in this scenario (millions)-$14If the evaluation provides a negative update on cost-effectiveness, we would reduce the amount we recommend to water chlorination interventions since there would be fewer gaps that are above our bar.
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Best guess on average CE of water chlorination interventions under this scenario (x cash)8Guess. Assuming opportunities estimated to be 10x-13x cash are now below our bar of 10x cash, such that the average CE of water chlorination interventions falls from ~10x cash to 8x cash.
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Increase in units of value from evaluation in this scenario per year91,900Calculation
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Scenario 2: Cost-effectiveness stays the same (cost-effectiveness stays at 10x cash)
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Probability of scenario (assuming we fund the evaluation)34%Guess. Our bar was 8x cash when we approved a January 2022 grant to DSW; since we now have a 10x cash bar, this effectively means that water chlorination interventions have to become more cost-effective to "stay the same" (i.e., meet our bar).
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Annual funding to water chlorination interventions in this scenario (millions)$46Guess. If we get confirmation of our current cost-effectiveness estimates, we would likely recommend funding opportunities currently estimated to be at least 10x cash. It is also possible that we may want to recommend more funding to these programs, even if our cost-effectiveness best guess stays the same, due to the increased confidence in our estimates. This would depend on our level of confidence in the evaluation results.
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Best guess on average CE of water chlorination interventions under this scenario (x cash)10Conservative guess, see cell B10. We use a lower value than the 13.8x cash calculated in cell B10 to account for uncertainty in that estimate and to avoid overstating the cost-effectiveness of the RCT.
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Increase in units of value from evaluation in this scenario per year0Calculation
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Scenario 3: Positive update on CE (Opportunities estimated to be 7x-10x cash are now at/above our bar)
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Probability of scenario (assuming we fund the evaluation)33%Guess
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Change in annual funding to water chlorination interventions in this scenario (millions)$39Conservative estimate. If we get a positive update on cost-effectiveness, we're likely to direct more funding to water chlorination interventions, since even more may meet our bar and we'd be more confident in the underlying evidence.
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Best guess on average CE of water chlorination interventions under this scenario (x cash)12Guess. Assuming opportunities estimated to be 7x-10x cash are now at/above our bar, such that average cost-effectiveness of water chlorination interventions moves from being ~10x cash to 12x cash.
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Increase in units of value from evaluation in this scenario per year262,763Calculation
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Total increase in units of value from evaluation per year117,039Calculation
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Present-discounted value of increase in units of value from evaluation903,742Calculation
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Cost-effectiveness from value of information (x cash)25Calculation
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Ad hoc adjustments
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Risk that we learn this is above/below our bar and are wrong-20%Rough guess. On the one hand, we think this is likely to be a well-powered, well-executed RCT, which makes us think we should reduce this adjustment from -20%. On the other hand, updating incorrectly would be very costly given how important this trial is to our overall CE estimates and future funding of water quality interventions, which makes us think it should be higher. We believe these considerations net out to around -20%.
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Risk that pilot/study is funded without us in a few years-10%Given the study authors and potential interest from other funders, we believe it is reasonable to assume that some version of this study might be funded within a few years.
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Benefit from influencing other funders/value to broader research community100%Subjective guess based on row 64 below
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Downside adjustment70%
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Cost-effectiveness from value of information (x cash), post-adhoc adjustments42
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Percent of value from each scenario
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Scenario 1: Negative update (Opportunities estimated to be 10-13x cash are now below our bar of 10x cash)26%Calculation
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Scenario 2: Cost-effectiveness stays the same (cost-effectiveness stays at 10x cash)0%Calculation
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Scenario 3: Positive update (Opportunities estimated to be 7-10x cash are now at/above our bar)74%Calculation
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CheckWe're goodCalculation
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Funding on water access$140,000,000,000"ODA for water did not keep pace with the growth in ODA for all sectors combined, however, which increased from $42 billion in 1995 to $140 billion in 2014." World Bank, Aid Flows to the Water Sector Overview and Recommendations, 2016.
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Likelihood that the grant moves some of that funding to water quality5%
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% of water ODA moved to water quality5%
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Ev of funding moved to water quality$350,000,000
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