Quality Perceptions and Water Treatment Behavior at the Household Level

Contaminated drinking water is a major contributor to illnesses in low-income countries. Individuals may take measures to avoid drinking contaminated water, by boiling, filtering, or chlorinating it, or by drinking bottled water. However, lack of information about water quality in some communities may lead individuals to perceive water quality to be better than it could be and therefore not allocate sufficient resources to avoid drinking contaminated water, or to perceive water quality to be worse than it is thereby wasting resources on treating the water or buying bottled water. We build an expected utility model to demonstrate that individuals may over or under invest in improving drinking water depending on their perceptions of water quality. Perceptions depend on uncertain health outcomes as well as other potentially confounding influences (e.g., aesthetic characteristics of the water and cultural norms). Simulations demonstrate conditions under which individuals correct their perceptions over time versus when policy interventions (e.g., information campaigns) may effectively correct perceptions.