Perception, Status, & Bottled Water
Young and high-income people are more likely to purchase bottled water because they perceive it to be purer, safer and healthier than municipal water, researchers have found.
“We initially thought that frequency of bottled-water purchases wouldn’t depend on income level,” said David Gay, economics professor. “But, in fact, we discovered that people who earn more money per year, especially those who earn greater than $50,000 annually, purchase more bottled water, either on a daily basis or two to three times a month.”
The bottled-water market has never been better. In 2005, worldwide sales exceeded $10 billion. In the United States, consumers now drink more bottled water annually than any beverage except soda. Beverage companies and business researchers yearn to know what drives this market, especially when several studies have demonstrated that bottled water is no purer or safer than tap water.
Via the Arkansas Poll, Gay, economics professor Charles Britton, and Richard Ford, professor of economics at the University of Arkansas at Little Rock, asked why and how often Arkansans purchase bottled water. In analyzing responses, the researchers considered age, income level and education level to identify characteristics of the market for bottled-water in Arkansas, which has an abundance of naturally occurring water.
The researchers found that higher incomes led to a greater likelihood of buying bottled water. Further, more people under 40 bought bottled water on a daily basis and more people under 50 bought bottled water on a monthly basis than those in the older categories.
The researchers could not state conclusively that education level influenced the decision to purchase bottled water, although data seemed to indicate that purchase decisions were based on perceptions of safety and health rather than reality.
“Our findings might lead one to believe that bottled-water producers have successfully marketed their high-margin products,” Britton said. “Also, considering the ages and income levels of bottled-water consumers, the results could lead to the contention that bottled water is a status symbol, and its market is based, at least in part, on ‘snob appeal’.”