conducted our analysis of expenditure at the household level—and average household size may vary across deciles, particularly in Africa—average total expenditure at the household level may not increase as expected when moving across the household per capita expenditure distribution.

# **Service area (SA)**

Following Angel-Urdinola and Wodon (2007a), households are considered to have potential access to a network if they are located in a service area ( _SAh_ ),<sup>9</sup> which takes the value of 1 if other households in their neighborhood reported having water connections in a household survey. We assume that households in a _SAh_ have the option of connecting to the piped water network present in their neighborhood. The neighborhood is proxied by the enumeration area where the household is located, according to household surveys. However, this assumption may not always be correct. If a neighborhood covers a large geographical area, or if the presence of an adjacent water main varies by household, the survey figures may overestimate the actual number of households with potential access to the piped water network.

We can define the ratio of all households that have potential access ( S h=1 1(S h<sup>= 1)</sup> ]/ ) and the equivalent ratio for the poor, which is defined as the number of poor households HH HH<sup>= ∑</sup> that have potential access divided by the total number of poor households ( S HH [∑h=1 1(S h<sup>= 1)</sup> ). PP<sup>=</sup> PP ]/PP

# **Connected (C)**

We set this variable to 1 if a household is connected to and drawing from the water network, and to zero otherwise. This is determined by the main source of drinking water, as self-reported in household surveys. We then define , as the share of households that are connected to the network among those with potential access (i.e., located in a service area), which is a subset of all households _H._ HH|SSAA CC Hence, S<sup>xCC</sup> is the proportion of poor households that are connected, conditional on their having HH HH|SSAA<sup>is equal to the actual connection rate among all households. Analogously,</sup> potential access (or being located in a service area) or, equivalently, the number of poor PP|SSAA CC households that are connected divided by the number of poor households that have potential access to the network.

# **Quantity of water consumed among those connected (Q)**

We construct this variable by imputing water consumption volumes from self-reported household water expenditure, _EH|T_ , conditional on being connected to the network. The conversion is undertaken using the corresponding tariff structure from the IBNET data.<sup>10</sup>

In the first round of calculations, we impute quantities for households for which (i) the total bill for water consumption depends on the quantity consumed, (ii) the value of self-reported

> 9 The variable _service area_ ( _SA_ ) is equivalent to the variable _access_ ( _A_ ) in Komives et al. (2005) and Angel-Urdinola and Wodon (2007a). In this paper we prefer the phrase _service area_ because it better reflects the variable we are measuring.

> 10 Information on how this match is made for each country is provided in the appendix.

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