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

  • Joshua Graff Zivin
  • Matthew Neidell
  • Wolfram Schlenker

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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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.101.3.448
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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 101 (2011)
Issue (Month): 3 (May)
Pages: 448-53

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Handle: RePEc:aea:aecrev:v:101:y:2011:i:3:p:448-53
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  1. Wolfram Schlenker & Sofia B. Villas-Boas, 2009. "Consumer and Market Responses to Mad Cow Disease," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1140-1152.
  2. Timothy K.M. Beatty & Jay P. Shimshack & Michael B. Ward, 2005. "Are Mercury Advisories Effective? Information, Education, and Fish Consumption," Discussion Papers Series, Department of Economics, Tufts University 0502, Department of Economics, Tufts University.
  3. Harrington, Winston & Portney, Paul R., 1987. "Valuing the benefits of health and safety regulation," Journal of Urban Economics, Elsevier, vol. 22(1), pages 101-112, July.
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