The Perception of Residential Water Tariff, Consumption, and Cost: Evidence of its Determinants Using Survey Data

Abstract

AbstractIn a survey of 1,500 households in Zaragoza (Spain), we found that respondents did not accurately know what the price of water was, and what the characteristics of the water tariff were, how much water they consumed, or how much it cost them; they thought they consumed less water than they actually did, and thought that their consumption level was normal; they believed they paid more than they really did, and considered the payments to be appropriate or expensive. Based on this sample of households, this paper analyses what determines the level of accuracy in the perception of consumers about their water tariff, their water consumption, and their total water cost, or, in other words, what determines the closeness between their perception and reality. The methodology applied is based on maximum likelihood estimates using various probit/logit models. The results obtained allow to identify the collectives to whom an information policy should be directed in order to approximate their perceptions closer to the real tariff, consumption and cost of water in households, and to point out the kind of information that should be transmitted in order to contribute to the preservation of water resources.