Exploring Poverty Penalties in Water and Housing Services and Their Influence on the Economic Decision-Making of Slum Households in Dhaka

Abstract

Abstract

The disparate prices of access to key services are becoming increasingly relevant factors in urban poverty in the Global South, whereas little effort has been made to understand the combined effects of various service deprivations on household economic decisions. The paper explores the interactions between water and housing poverty penalties on the livelihoods and economic decision-making of slum dwellers in Dhaka, Bangladesh. The study combined an exploratory sequential mixed methods design, which uses 30 in-depth household interviews with a survey of 100 slum households in four settlements in Dhaka North and Dhaka South City Corporations. The results show that the poor households face a compounded poverty penalty, with insecure housing and lack of water resources imposing disproportionately heavy financial burden and implementing decreased possibilities of investment in savings, education, health, and livelihood. Households currently spend 32.7 % of monthly income on rent and water, which is above known affordability levels, and 75 % of households report having no saving ability. Correlation analysis also shows that households with low income have greater relative burdens and housing and water penalties reinforce one another. This research builds on the poverty penalty theory in the context of extending it to the issue of urban inequality, informal system of service provision and sustainable livelihoods in growing urban cities across the world. The findings suggest that water and housing poverty penalties interact to constrain household livelihood choices and reduce opportunities for saving, education, health expenditure, and productive investment.