Understanding the economic impacts of disruptions in water service

Over the past decade, there has been much attention focused on community readiness for catastrophic emergency events, such as major natural disasters or terrorist attacks. However, though the economic costs associated with experiencing such an event are high, the probability of such events occurring is quite low. At the same time, less catastrophic events that temporarily disrupt essential services to local areas, such as water and electricity, are quite common. However, there is little research that documents residents’ actual economic costs when their water service is disrupted. In this paper, we contribute to the growing literature assigning economic value to residential water service by documenting the economic costs residents report from routine, small-scale water disruptions through focus groups and in-person interviews. We find that residential impacts ranged from over $1400 in savings (from working more hours than usual and eating out less than usual) to a cost of over $1000, with an overall average of $93.96. These costs, particularly when multiplied over a substantial population, become quite significant and demonstrate the importance of studying the economic costs of such events.