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The importance of being informed: experimental evidence on the demand for environmental quality

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  • Jyotsna Jalan
  • E. Somanathan

Abstract

To what extent does information affect the demand for environmental quality? A randomly selected group of households in Gurgaon, India was informed whether (or not) their drinking water had tested positive for fecal contamination using a simple test kit costing less than $0.50. Households that were initially not purifying their water, and were told that their drinking water was contaminated, were 11 percentage points more likely to begin some form of home purification in the next 7 weeks than households that received no information. By way of comparison, an additional year of schooling of the most educated person in the household, is associated with a 4.4 percentage-point rise in the probability of initial purification, while a move from one wealth quartile to the next is associated with a 15 percentage-point rise. Households that received a "no contamination" result were not significantly different in their behavior from households that were not informed about their water quality. These results indicate that the issue of under-provision of information needs to be addressed when estimates of the demand for environmental quality are used for welfare or policy analysis.The data (Stata format) for this working paper is available at http://www.isid.ac.in/~som/

Suggested Citation

  • Jyotsna Jalan & E. Somanathan, "undated". "The importance of being informed: experimental evidence on the demand for environmental quality," Working papers 28, The South Asian Network for Development and Environmental Economics.
  • Handle: RePEc:snd:wpaper:28
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    References listed on IDEAS

    as
    1. Simone Borghesi, 1999. "The Environmental Kuznets Curve: a Survey of the Literature," Working Papers 1999.85, Fondazione Eni Enrico Mattei.
    2. 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(1), pages 83-106, February.
    3. Jyotsna Jalan & E. Somanathan & Saraswata Choudhuri, "undated". "Awareness and the Demand for Environmental Quality: Drinking Water in Urban India," Working papers 32, The South Asian Network for Development and Environmental Economics.
    4. Charles W. Abdalla & Brian A. Roach & Donald J. Epp, 1992. "Valuing Environmental Quality Changes Using Averting Expenditures: An Application to Groundwater Contamination," Land Economics, University of Wisconsin Press, vol. 68(2), pages 163-169.
    5. Harrington, Winston & Krupnick, Alan J. & Spofford, Walter Jr., 1989. "The economic losses of a waterborne disease outbreak," Journal of Urban Economics, Elsevier, vol. 25(1), pages 116-137, January.
    6. Madajewicz, Malgosia & Pfaff, Alexander & van Geen, Alexander & Graziano, Joseph & Hussein, Iftikhar & Momotaj, Hasina & Sylvi, Roksana & Ahsan, Habibul, 2007. "Can information alone change behavior? Response to arsenic contamination of groundwater in Bangladesh," Journal of Development Economics, Elsevier, vol. 84(2), pages 731-754, November.
    7. 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 203-221, May.
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    More about this item

    Keywords

    Environmental quality; drinking water; information; awareness; experiment.;

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • O10 - Economic Development, Innovation, 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 Accounts and Accounting; Environmental Equity; Population Growth

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