Consumer perception and information in a model of household water usage: The case of jacksonville, FL

Abstract

Consumption of bottled water in the U.S. continues to grow despite the higher user price and greater environmental cost relative to municipal tap water. Convenience is surely one reason for this trend, but it is less relevant for in-home consumption of bottled water. The existing literature highlights perceptions of quality, access to information and personal experience as important factors influencing water usage in the home. In this paper we report the results of a 2018 survey of water customers of Jacksonville Electric Authority (JEA), the primary municipal water utility in Northeast Florida. The survey includes detailed questions regarding self-reported household water usage, information availability, information processing, trust in institutions and demographic characteristics. In addition, in cooperation with JEA, we matched the survey results with administrative data on geographic location within the system. Using a bivariate probit regression method, we estimate the determinants of water usage in the home. The results show that concern for drinking water safety is the principal contributor of bottled water consumption. Moreover, the evidence illustrates how information from water quality reports and objective measures of water hardness translate into the drinking water choice. We also show that greater transaction costs of bottled water due to low access to retail suppliers is associated with a substitution of water filtration for bottled water.