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American Economic Review: Vol. 101 No. 3 (May 2011)

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

Article Citation

Zivin, Joshua Graff, Matthew Neidell, and Wolfram Schlenker. 2011. "Water Quality Violations and Avoidance Behavior: Evidence from Bottled Water Consumption." American Economic Review, 101(3): 448-53.

DOI: 10.1257/aer.101.3.448

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.

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Authors

Zivin, Joshua Graff (U CA, San Diego)
Neidell, Matthew (Columbia U)
Schlenker, Wolfram (Columbia U)

JEL Classifications

D12: Consumer Economics: Empirical Analysis
Q25: Renewable Resources and Conservation: Water
Q28: Renewable Resources and Conservation: Government Policy
Q53: Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
Q58: Environmental Economics: Government Policy


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