Water Quality Violations and Avoidance Behavior: Evidence from Bottled Water Consumption
Joshua Graff Zivin, Matthew Neidell, Wolfram Schlenker
American Economic Review · 2011 · Volume 101 · Issue 3
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.
Keywords
Consumer Economics: Empirical Analysis, Renewable Resources and Conservation: Water, Renewable Resources and Conservation: Government Policy, Air Pollution, Water Pollution, Noise, Hazardous Waste, Solid Waste, Recycling, Environmental Economics: Government Policy
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