The value of good quality drinking water to Canadians and the role of risk perceptions: a preliminary analysis.

Canadian municipal water utilities have had to face many difficulties in the past few years, not the least of which has been an erosion of consumer confidence in the safety of publicly supplied drinking water. This paper discusses how economic theory is used to develop a methodology for determining consumers' or society's preferences for better quality drinking water and how these preferences are expressed in the trade-offs made between money and two different types of risk reductions: mortality and morbidity. These trade-offs are observed by examining actual consumer behavior and/or in structured (hypothetical) market choices. The information gained can be used to structure more efficient water pricing schemes for municipal water utilities and to aid these utilities in their infrastructure investment decisions.