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

15 Pages Posted: 18 Jan 2011 Last revised: 13 Feb 2022

See all articles by Joshua Graff Zivin

Joshua Graff Zivin

School of Global Policy and Strategy; National Bureau of Economic Research (NBER)

Matthew Neidell

Columbia University; University of Chicago - Department of Economics and CISES; PERC - Property and Environment Research Center

Wolfram Schlenker

Columbia University - School of International & Public Affairs (SIPA)

Date Written: January 2011

Abstract

In this paper, 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.

Suggested Citation

Graff Zivin, Joshua and Neidell, Matthew and Schlenker, Wolfram, Water Quality Violations and Avoidance Behavior: Evidence from Bottled Water Consumption (January 2011). NBER Working Paper No. w16695, Available at SSRN: https://ssrn.com/abstract=1740974

Joshua Graff Zivin (Contact Author)

School of Global Policy and Strategy ( email )

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National Bureau of Economic Research (NBER)

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Matthew Neidell

Columbia University ( email )

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University of Chicago - Department of Economics and CISES ( email )

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PERC - Property and Environment Research Center

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Wolfram Schlenker

Columbia University - School of International & Public Affairs (SIPA) ( email )

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