Water Quality Violations and Avoidance Behavior: Evidence from Bottled Water Consumption
American Economic Review
vol. 101,
no. 3, May 2011
(pp. 448-53)
Abstract
We examine the impact of poor water quality on avoidance behavior by estimating the change in bottled water purchases in response to drinking water violations. Using data from a national grocery chain matched with water quality violations, we find an increase in bottled water sales of 22 percent from violations due to microorganisms and 17 percent from violations due to elements and chemicals. Back-of-the envelope calculations yield costs of avoidance behavior at roughly $60 million for all nationwide violations in 2005, which likely reflects a significant understatement of the total willingness to pay to eliminate violations.Citation
Zivin, Joshua Graff, Matthew Neidell, and Wolfram Schlenker. 2011. "Water Quality Violations and Avoidance Behavior: Evidence from Bottled Water Consumption." American Economic Review, 101 (3): 448-53. DOI: 10.1257/aer.101.3.448JEL Classification
- D12 Consumer Economics: Empirical Analysis
- Q25 Renewable Resources and Conservation: Water
- Q28 Renewable Resources and Conservation: Government Policy
- Q53 Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- Q58 Environmental Economics: Government Policy