Children's health improves on average as a result of policy interventions that expand access to piped water. However, the gains largely bypass children in poor and poorly educated families. The World Health Organization estimates that four million children under the age of five die each year from diarrhoea, mainly in developing countries. Unsafe drinking water is widely thought to be a major cause, and this has motivated public programs to expand piped water access. In this paper, we estimate the impacts on child health of piped water in a developing country. We argue that expanding piped water is not a sufficient condition to improve child health status in this setting. The source of ambiguity lies in the uncertainty about how public and private inputs interact in the production of health conditional on the heterogeneous quality of public inputs. The private inputs relevant to diarrhoea prevalence and duration include hygienic water storage, boiling water, oral re-hydration therapy, medical treatment, sanitation and nutrition. With the right combination of these public and private inputs, diarrhoeal disease is almost entirely preventable. However, behaviour is known to play an important role. Public inputs such as access to a piped water network can either displace parentally chosen private inputs or be complementary to them. Even when there are child-health benefits (factoring in parental spending effects) the gains could well by-pass children in poor families, taking account of parental behavioural responses to poverty. For example, if piped water increases the marginal health benefit for parents of spending more on their children's health, and such spending is a normal good, then the health gains from piped water will tend to rise with income. This is not implausible on a prior grounds. Piped water in rural areas of developing countries is no doubt safer than many alternative sources, but it is often the case that it still needs to be boiled or filtered and stored properly to be safe to drink. This can be a burden for a poor family. A poor, or poorly educated, mother may reasonably think that there are better uses of time and money needed to provide this complementary input to piped water. It is plausible that there are private inputs that are cooperant with piped water in determining child health. However, it can also be argued that such private inputs have positive income effects in this setting, and there is supportive evidence. For example, it is estimated that 29 per cent of the poorest quintile (in terms of a composite wealth index) of families in rural India in 1992/93 used oral rehydration therapy when a child had diarrhoea, as compared to 50 per cent in the richest quintile. Similarly, 52 per cent of those in the poorest quintile sought medical treatment, as compared to 78 per cent in the richest. The upshot of all this is that being connected to a piped water network may well be of limited relevance to the poor from an epidemiological standpoint. Income poverty and lack of education and knowledge may well constrain the potential health gains from water infrastructure improvements. The incidence of health gains need not favour children from poor families, even when facility placement is pro-poor. India undoubtedly accounts for more child deaths due to unsafe water than any other single country. Parikh et al (1999) quote an estimate of 1.5 million child deaths per year in India due to diarrhoea and other diseases related to poor water quality. Moreover, estimates indicate that one-fifth of the population of rural India do not have access to safe drinking water. Expanding access to piped water is considered an important development action in India. Our aim is not to model the effect of contaminated water on child health in this setting. Rather we attempt to quantify the child health gains in terms of diarrhoeal disease from policy interventions that expand access to piped water, and to see how the gains vary with household circumstances, notably income and education. The main questions we ask are: Is a child less vulnerable to diarrhoeal disease if he/she lives in a household with access to piped water? Do children in poor, or poorly educated, households realize the same health gains from piped water as others? Does income matter independently of parental education? The following section establishes the theoretical ambiguity in the effect of access to piped water on child health. Section 3 discusses the methodology we propose to test for child health gains from piped water. Section 4 describes our data for rural India. The results are given in section 5, while section 6 concludes. To Be Concluded