Behavioral Economics to Reduce Bottled Water Consumption

A glass of water being hold in the hand with a text above it saying: "Behavioral economics to reduce bottled water consumption"
In today’s blog post, we will discuss behavioural economics in the field of water consumption and how our Alxedo Smart Water Purifier can be actively part of the solution for reducing unnecessary bottled water consumption.

What is Behavioral economics?

Behavioral economics is the field of study which blends psychology and economics and can help to provide insights into how and why individuals act in ways which are against their best interests.

Contrary to traditional economics, behavioural economics demonstrates that people are subjected to numerous biases and self-control issues when making decisions.

According to a study conducted by Gregory Donworth and Vaidehi Uberoi (University of Pennsylvania), there are several hidden biases such as social perceptions of drinking bottled water and perceived low cost of bottled water which considerably contribute towards its heavy consumption across the world. Single-use plastic water bottles are a major source of pollution and energy consumption not to mention a financial burden on consumers worldwide.

In order to spread more awareness among people consuming bottled water, principles from behavioural economics can be used to develop solutions to reduce the status symbol effect that branded water can have, and better frame its actual exorbitantly high costs.

As demonstrated in Gregory Donworth and Vaidehi Uberoi’s study, there are three main factors that influence consumers in their bottled water purchases: Lack of Trust, Status Symbol and Wrongly perceived bottled water’s low cost.

Lack of Trust

To this day, a general lack of trust in water quality constitutes the primary reason why consumers prefer buying bottled water; this is due to safety concerns on drinking tap water which is generally perceived as unhealthy to consume. Furthermore, individuals are influenced by the status quo bias where they prefer things to stay the same by doing nothing, or by continuing with a decision that was previously made even though this might affect them negatively.

The research of Prof. Delia Montero Contreras, chair of economics at Universidad Autónoma Metropolitana from Mexico, indicated that eight out of every 10 Mexicans — and nine out of every 10 Mexico City residents regularly consume bottled water primarily because of their lack of confidence in the public water supplies and its quality.

She states:” It’s not a fashion, it’s not a habit of the elite and it doesn’t have to do with the income level or education. Bottled water is the fastest-growing section of the beverage industry, and we spend more than 4 billion pesos (US $207 million) a year on bottled water in Mexico City.”

Accordingly, bottled water companies have nothing but plenty of room to raise the prices of their products however they prefer. The problem of this insanely high consumption of bottled water has several fatal consequences - it causes tremendous pollution for our environment due to the low recycling rate of plastic bottles. Additionally, plastic bottles emit microplastics, which are being carried into the human organism through water consumption. Furthermore, especially for economically vulnerable groups, bottled water represents a financial burden.

The UN proposes that people shouldn’t spend more than three per cent of their income on water services. In Mexico, the reality shows numbers far away from the suggested threshold of three per cent. 80 per cent of the Mexican households spend as much as eight per cent or more on water services. Apart from the absolute financial burden, all of us should reflect on the relative expense of bottled water. Less than 5 per cent of the price of a bottle of water accounts for the content of the bottle, whereas, 95 per cent relate to the bottle itself, transportation and margin of the producer, which eventually account for the pollution caused by each consumed litre.

All those facts lead to our important question from the beginning — how can Alxedo reduce the burden for the people and for the environment?

The answer is clear, by making tap water drinkable and therefore, accessible for its consumption. By developing a highly effective reverse osmosis system the Alxedo Smart Water Purifier allows the removal of chemicals, non-dissolved and dissolved solids, viruses, bacteria and other contamination from the water. To sum it up, Alxedo offers a solution for the accessibility of drinkable tap water.

Running tap water with a text next to it saying: "Trust in water"

How can our Smart Water Purifier possibly encourage safe and drinkable tap water consumption for consumers?

Thanks to its highly effective reverse osmosis system allowing to remove all chemicals, non-dissolved and dissolved solids, viruses, bacteria present in the water, people can safely consume their purified tap water. To provide evidence for their safe consumption, our Smart Water Purifier is equipped with sensors and WIFI to provide a real-time indication of the water quality to its users. Therefore, Alxedo offers a safe solution for accessibility and a new level of confidence in drinkable tap water.

Status Symbol

Status symbol constitutes the second reason which might lead consumers in their bottled water’s purchase decisions: as the majority of consumer-packaged goods, also bottled water has been heavily branded and marketed in recent years. Consumers are most likely to consider buying branded bottled water if they are properly sponsored by renowned athletes, celebrities and other authority figures.

Being an environmentally conscious company, Alxedo believes that a habit of sustainable living will be considered as an honorable and demanded status in our society. We are starting a movement towards a plastic-free water consumption where being part of is perceived as a more valuable status than a branded plastic bottle ever was.

Perceived low costs of bottled water

Generally bottled water on average costs 300 times more than tap water, but still, when people shop in convenience or grocery stores, bottled water is perceived as one of the lower-priced items available, causing it to be a largely common purchased item.

We at Alxedo want to overcome once and for all the obstacle of bottled water consumption by providing the best water quality for our consumers at a more affordable price than bottled water. Our app allows monitoring your money savings through using our Smart Water Purifier and avoiding bottled water consumption.

How can we at Alxedo manage to do so?

A plant growing out of coins with a text next to it saying: "Money savings"

The Alxedo’s monthly subscription offers a free installation of the purifier, more than 50% discount on the purifier, all features of the app for water quality monitoring and the free delivery and exchange of the cartridges. With our offer we guarantee the best possible water quality to our clients, provide the evidence of our quality standards through the water quality indication in our app, the convivence of the automated and free cartridge exchange and at an average cost reduction of 43% in comparison to bottled water.

We at Alxedo strongly believe that we can be part of the solution by offering an affordable, safe, and environmentally friendly alternative for drinkable tap water directly available inside of our homes.