A less expensive toilet: the impact of targeted subsidies on latrine purchases in Cambodia

iDE’s sanitation marketing efforts in Cambodia have resulted in over 250,000 sales of improved pourflush latrines. Despite the overall efficacy of this approach, iDE recognizes that market actors are not necessarily incentivized to reach the poorest segments of the market. iDE and Causal Design utilized a randomized controlled trial, in which poor households in treatment villages were offered partial subsidies, financing and cash-only options, while control-village households were offered only financing or cash-only purchase options, to test which financing mechanism leads to the greatest coverage change among poor households, while having the least distortionary effect on the market. The study finds uptake rates among poor households increased by 14-16 percent compared to the control group, while there was no significant effect on non-poor households. This study provides compelling evidence for the impact, as well as increased cost-effectiveness, of well-targeted subsidies on latrine uptake among lower-income households in a market-based approach.