Abstract
•Social comparisons significantly influence households’ satisfaction with municipal water service delivery the three reference group definitions.•Interestingly, the sign of the effect varies depending on the reference group definition.•Moreover, we find evidence of both downward and upward comparison, with the latter having the strongest effect, comparison effects influence households differently.•Satisfaction surveys serve a limited purpose as a foundation for public policy.
This paper investigates the role of social comparisons in determining the satisfaction of South African households with municipal water service delivery. We use a unique balanced-panel dataset from 2015 to 2017 with national coverage, from Statistics South Africa General Household Surveys. Our results show that social comparison significantly affect household satisfaction with water service delivery. Moreover, we find evidence of both downward and upward comparison, with the latter having the strongest effect. Hence, we find indication of both altruism or risk sharing and information signalling between closer neighbours. We conclude that, since satisfaction with water service delivery seems to be strongly influenced by psychological and behavioural factors such as social comparison, satisfaction surveys serve a limited purpose as a foundation for public policy, because satisfaction is determined in part by factors that are unrelated to the actual service experienced by households. Our empirical evidence confirms this line of reasoning. The findings are robust for variety of reference groups.
