Factors affecting customers' satisfaction with tap water quality: Does privatisation matter in Italy?

This paper aims to examine if users perceive a difference in tap water quality supplied by publicly owned or privately owned water operators. More generally, this paper analyses whether and how certain relevant variables affect water quality using customer satisfaction as an indicator of water quality. Since the decision to privatise the service may be influenced by environmental and geographical factors as well as water operators' characteristics, data were analysed using a treatment effects model, in which privatisation was considered an endogenous binary treatment variable. Data were from a sample survey of 485 students enrolled at the University of Pisa (Italy). Our results suggest that water operator ownership influences the perceived quality of the supplied tap water. Decision-makers should include water quality as a relevant issue when deciding whether to privatise water services management. In addition, since there is a relationship between the perception of tap water quality and the quality of public service provision, for policy makers, it is of utmost importance to highlight the areas where the lack of satisfaction is higher and to encourage investment and water quality improvement programmes in these contexts. • Water operator ownership influences the perceived quality of tap water. • Water quality perception is not always related to water standard compliance. • Perception of water quality relates to the quality of public service provision. • Perceived quality decreases when mixed or private firms manage the water service. [ABSTRACT FROM AUTHOR]