Working Paper: NBER ID: w16695
Authors: Joshua Graff Zivin; Matthew Neidell; Wolfram Schlenker
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.
Keywords: Water Quality; Bottled Water Consumption; Avoidance Behavior
JEL Codes: H41; I18; Q53; Q58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| drinking water violations (Q25) | bottled water sales (L95) |
| microorganism violations (L65) | bottled water sales (L95) |
| elements and chemicals violations (Q53) | bottled water sales (L95) |