Reports of Water Quality Violations Induce Consumers to Buy Bottled Water

Andreas Duus Pape, Misuk Seo
2015 Agricultural and Resource Economics Review  
The 1996 Safe Drinking Water Act Amendments required that water utilities send quality reports to customers. We test whether receiving such reports of health violations increases purchases of bottled water using newly released data and disaggregate changes in demand at the intensive and extensive margins. We find that a water-quality violation makes American households 25 percent more likely to purchase bottled water and, among purchasers, expenditures increase 4–7 percent, both larger
more » ... oth larger responses than found in previous studies. Consumers spend approximately $300 million per year—about 4 percent of annual national spending on bottled water—to avoid health risks associated with violations.
doi:10.1017/s1068280500004639 fatcat:bihwyzgiqzc6vbricva65kfk3q