An Economic Analysis of Households drinking choices in coastal zones with saltwater intrusion : the case of Medina, Philippine

This study presents a discrete model of the water choice in the municipality of Medina (Philippines) and uses data from 248 face to face interviews conducted in February 2019 for the BIMWAM project. Every household in the sample is connected to the piped system. However, for dinking purposes, households do not use their pipe water supply, or augment it with alternative sources. Refilling stations, in particular, are strong competitors of the piped system, the two sources having disadvantages and advantages playing a role in the water choice. The study aims to analyze the effects of these characteristics on water source choice with a bivariate probit model that allows to account for the interdependent choices. An additional challenge lies in the appropriate econometric treatment of the quality perceptions. However, regarding our dataset and our specification, the quality perceptions do not seem to be endogenous. Hence, quality perceptions might not be influenced by water choices, as suggested by the literature and might be fixed to some extent. One should investigate the rooting of quality beliefs and to what extent they may evolve over time. The findings suggest that important factors influencing household’s choice for either one of the two sources are: education of the household and its composition, the taste, the perceived accessibility and perceived quality attached to water sources. For many determinants, the refilling stations and the piped system display strong substitution relationships. For example, as the perceived access to refilling stations diminishes, the probability to rely solely on the pipe water increases by 0.11 points while the probability to rely solely on refilling stations decreases by 0.1 points.