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Being informed matters: Experimental evidence on the demand for environmental quality

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Author Info
Jyotsna Jalan () (Indian Statistical Institute, New Delhi)
E.Somanathan () (Indian Statistical Institute, New Delhi)

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Abstract

A randomly selected treatment group of households in Gurgaon, India was informed whether (or not) their drinking water had tested positive for fecal contamination using a simple test costing about $0.50. Households that were not initially purifying their water, and were told that their drinking water had tested positive, were 11 percentage points (p-value < 0.01) more likely to begin some form of home purification in the next 7 weeks than households in the control group that received no information. This effect raised the mean purification expenditure in the sample by 10 percent. By way of comparison, an additional year of schooling of the most educated person in the household, raises the probability of (initial) purification by 4.4 percentage points while a move from one wealth quartile to the next raises it by 15 percentage points. Households that received a negative test result were not significantly different in their behavior than control households. Gurgaon is considerably wealthier than the average Indian city, yet awareness about the causes of diarrhea is low.

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Publisher Info
Paper provided by Indian Statistical Institute, New Delhi, India in its series Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers with number 04-08.

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Length: 30 pages
Date of creation: Apr 2004
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Handle: RePEc:ind:isipdp:04-08

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Related research
Keywords: Environmental quality; drinking water; information; awareness; experiment;

Find related papers by JEL classification:
I12 - Health, Education, and Welfare - - Health - - - Health Production
O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounting

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Dasgupta, Purnamita, 2004. "Valuing health damages from water pollution in urban Delhi, India: a health production function approach," Environment and Development Economics, Cambridge University Press, vol. 9(01), pages 83-106, February. [Downloadable!]
  2. Smith, V Kerry & Desvousges, William H & Payne, John W, 1995. "Do Risk Information Programs Promote Mitigating Behavior?," Journal of Risk and Uncertainty, Springer, vol. 10(3), pages 203-21, May.
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