Environment and Development Economics

Research Article

Awareness and the demand for environmental quality: survey evidence on drinking water in urban India*


a1 Centre for Studies in Social Sciences Calcutta, R1 Baishnabghata Patuli Township, Kolkata-700094, INDIA. Tel: (91)(33)2462-5794/5795/7252. Fax: (91)(33)24626183. Email: jjalan@cssscal.org, jjalan@gmail.com

a2 Planning Unit, Indian Statistical Institute, Delhi, India

a3 Department of Economics, University of North Carolina, Chapel Hill, USA


The demand for environmental quality is often presumed to be low in developing countries due to poverty. Less attention has been paid to the possibility that lack of awareness about adverse health effects of environmental pollution could also keep the demand low. We use a household survey from urban India to estimate the effects of schooling, exposure to mass media, and other measures of awareness on home water purification. We find that these measures of awareness have statistically significant effects on home purification and, therefore, on willingness to pay. These effects are similar in magnitude to the wealth effects. Average costs of different home purification methods are used to generate partial estimates of willingness to pay for better drinking water quality.

(Online publication March 06 2009)


* Financial support from the South Asian Network for Development and Environmental Economics (SANDEE) is gratefully acknowledged. We are grateful to two referees and an associate editor of this journal, Esther Duflo, Kirk Hamilton, M.N. Murty, Rohini Somanathan, Jeff Vincent, and several seminar participants for helpful comments. Dwiraj Bose provided excellent research assistance.