Poor water service quality in developed countries may have a greater impact on lower-income households

ABSTRACT

This article analyzes the relationship between perceived service quality and averting behaviours and averting expenditures across prominent water service attributes, using revealed preference survey data from New Zealand water supply customers. It finds that nearly 50% of consumers undertake averting behaviours, investing substantial amounts in improving their water service quality. Unexpectedly, lower-income households were more likely to undertake averting behaviours for the same perceived service quality, and spent more in their averting behaviours. This suggests that the burden of low-quality service is greater on lower-income households, not only relative to income but in absolute terms.

KEYWORDS:

• Averting behaviours
• affordable water service quality
• revealed preference
• New Zealand

Acknowledgments

The authors thank Magnus Söderberg and Penny Burns for their contribution to this article.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. With the exception of the Russian study (Larson and Gnedenko, 1999), in which water quality was not considered safe.

2. Distribution costs were neglected because inadequate information existed on which to base such estimates. Public source points were also neglected because they are not relevant to the New Zealand case.

3. For boiling water only. It was not possible to estimate power consumption for other equipment due to the variety of brands and models, and lack of information about volumes of water consumed.

4. For boiling water only. We did not include people’s time in maintaining equipment, as this time was negligible (< 2 hours per year).

5. In this article, all dollar values are New Zealand dollars.

6. Water restrictions are considered to occur in the dry months, when there is not enough water to supply to consumers at typical demand levels.

7. Sample calculation: Column A (terrible) × Column B (terrible) – Column A (excellent) × Column B (excellent) = $59.

8. Sourcing includes tanker, container or bottled water; groundwater/bore; rainwater from roof; river, stream or spring; travelling for better or additional water; recycled water systems; and reticulation.

9. Defined as experiences that affect their enjoyment, such as rust, sediments, or taste and smell.

Additional information

Funding

This work was supported by the University of South Australia, Opus International Consultants, and TD Meloche Monnex/Engineers Canada.