Water Kiosks and the Profits of Government Distrust

• In Event: Service Provision in the City: Successes and Failures

Abstract

This paper explores urban water kiosks as an indicators of distrust in local government. Water utilities in the United States well-earned reputations for delivering high-quality, potable drinking water at low prices. Despite widely available, high-quality tap water, American cities have seen a surprising proliferation of private drinking water kiosks. These free-standing, automated vending machines are frequently located in parking lots and provide “purified” drinking water to customers who drive up to fill their own containers with water, typically priced at $0.25-.35 per gallon—an order of magnitude more expensive than typical tap water. Moreover, these kiosks flourish not only in poor, isolated communities with a histories of water quality problems (e.g., the Rio Grande Valley), but also in major cities that enjoy high-quality drinking water utility service (e.g., City of San Antonio).

Drinking water vendors are common in the developing world, where access to potable water is scarce and public water utilities are unreliable. But their emergence in the United States presents a paradox and an obvious question: what explains the growth of drinking water kiosks in American cities?

Drinking water utilities provide water at a much lower unit cost than water kiosks and are subject to quality regulations that kiosks are not. Kiosk companies’ marketing materials suggest that urban water kiosks were created in response to water utility failures, and claim that their product converts “existing tap water into drinking water of exceptional purity.” More than 85 percent of the U.S. population receives its drinking water utility service from local governments. Thus, the proliferation of kiosks suggests that customers choose this higher-cost product because: a) they perceive local government water quality as inferior to kiosk water quality; b) they do not trust local government; or c) both. Whatever the precise appeal of water kiosks to customers, their growth strongly suggests that significant portions of the public distrust their local governments’ delivery of this vital service. In addition to their implications for government legitimacy, kiosks also threaten public health, since kiosks are not regulated under the Safe Drinking Water Act (SDWA), and people who eschew tap water often turn to sugary drinks instead.

We argue that kiosks are commercial manifestations of distrust in local government. Using an original dataset, we plot the locations of more than 2,100 corporate-owned water kiosks in the U.S., combining these spatial data with data on demographics, economic conditions, and political institutions in order to identify the social, economic, and political correlates of kiosk locations. Spatial analysis suggests no significant correlation between kiosk locations and SDWA violations, suggesting that health concerns are probably not the main drivers of kiosk presence. However, we find that kiosks are disproportionately located in low-income, predominantly Hispanic neighborhoods. This result is consistent with recent research reporting low trust in water utilities among Hispanics generally, and political marginalization among poor Hispanics in particular.

With kiosks as a point of departure, we develop a theory that predicts private market provision of public services due to distrust of and alienation from public institutions. Distrustful populations turn to the private market to provide services rather than engaging governance institutions, and in turn political institutions do not respond to those communities’ needs. Consequently, private firms capture profits in the form of a “distrust premium” paid by distrustful citizen-customers.

Authors

• Manny P. Teodoro, Texas A&M University

• Samantha Zuhlke, Texas A&M University