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.