Water Quality, Household Perceptions and Averting Behavior: Evidence from Nicaragua

Abstract

We investigate household perceptions of water quality and associated averting behaviors using household survey data from León, Nicaragua. Seemingly unrelated instrumental variable probit models are estimated to take the potential endogeneity of water quality perceptions and the relationship between different averting behaviors into account. Survey results indicate that a large majority of households use tap water for drinking purposes. Less than 26% of sampled households implement in-home water treatments and about 33% of households consume bottled water. Results indicate that observed averting behaviors (i.e., consumption of bottled water and in-home water treatments), or lack thereof, are primarily driven by the perceived quality of tap water. Findings also indicate that perceptions of water quality are associated with service performance and assessment of water quality relative to peers. Policy implications are discussed.