Your non-profit agency has been given 20000 to spend on

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Reference no: EM13381947

Your non-profit agency has been given $20,000 to spend on health initiatives in the developing world. You must spend the money on one of two competing projects. First, you can spend the entire $20,000 to build a well in a village of 200 people. The well will provide clean water and reduce each individual's probability of death from 3% to 2.5%.

Second, you can spend the entire $20,000 to buy mosquito nets for people in several villages. In total, 800 people would see their probability of death drop from 3% to 2.9% due to a reduction in malaria infections.

a) What is the cost-effectiveness in terms of dollars per expected life saved for each of the two projects?

b) Which project would you recommend? Justify your recommendation.

c) Suppose that quality of life is significantly lower without clean drinking water due to frequent, debilitating bouts of diarrhea and dehydration. Describe how you might account for this fact in your analysis.

Reference no: EM13381947

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