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American Economic Review Vol. 101 No. 3 2011

Water Quality Violations and Avoidance Behavior: Evidence from Bottled Water Consumption

Joshua Graff Zivin1; Matthew Neidell2; Wolfram Schlenker3

1 University of California–San Diego, IR/PS, 9500 Gilman Dr., La Jolla, CA 92093, and NBER. · 2 Mailman School of Public Health, Columbia University, 600 W. 168th St., New York, NY 10032, and NBER. · 3 Department of Economics and SIPA, Columbia University, 420 West 118th St., New York, NY, 10027, and NBER.

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.

DOI
10.1257/aer.101.3.448
Volume
101
Issue
3
Pages
448-453
Language
en
Sources
crossref openalex bibtex:phds-export.bib

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