Privatising Water Utilities and User Perception of Tap Water Quality: Evidence from Spanish Urban Water Services

This paper seeks to contribute to the current debate about public versus private management of urban water supply services. The main purpose of urban water supply is to ensure the provision of a sufficient quantity of good quality water to users. This article examines water quality by using a subjective indicator: user satisfaction with tap water quality. The goal of the paper is to determine whether users perceive a difference in tap water quality supplied by public operators on the one hand, and by private-sector operators on the other. Data is sourced from a survey carried out in 64 Spanish cities. A number of different subjective determinants of water quality have been considered: the socio-economic characteristics of those surveyed, objective indicators of water quality, as well as environmental and economic factors of urban water services. Data analysis, using an ordered logit regression model, shows that when urban water services are in the hands of a private company, the quality of the tap water, as perceived by users, deteriorates.