Abstract

Consumers satisfaction with water and service quality are not always in line with monitored water and service quality compliance. Reducing the difference between perceptions and realities requires understanding how perceptions are formed and the factors that affect them. Most studies have researched these factors in developed countries. This study analyzes the factors that explain customer satisfaction with water and service quality and of the service provided by water supply and sanitation providers in Chile, shedding light on the factors that affect customer satisfaction in a developing country context and, also in a situation with stringent water service standards and reliable water supply. A Structural Equation Model was estimated, using an unbalanced pseudo panel with 32,745 observations collected by the Superintendencia de Servicios Sanitarios of Chile. Results indicate that perceived water quality has a strong influence on the perceived health risk. Additionally, customer risk perception mainly depends on organoleptics, which are explained by taste, odour, and clarity. Service quality and price are mainly influenced by the consumer's perception of water quality and the payment system. Furthermore, perceived health risk and service quality negatively impact customer satisfaction with water and service quality. Reducing the difference between perceptions and realities requires an understanding of how perceptions are formed. This research sheds light on these processes.