That is a new paper by W. Kip Viscusi, Joel C. Huber, and Jason Bell, the abstract is here:
This article examines evidence for the private rationality of decisions to choose bottled water using a large, nationally representative sample. Consumers are more likely to believe that bottled water is safer or tastes better if they have had adverse experiences with tap water or live in states with more prevalent violations of EPA water quality standards. Perceptions of superior safety, taste, and convenience of bottled water boost consumption of bottled water. Blacks and Hispanics are more likely to drink bottled water due to their relatively greater exposure to unsafe water and greater risk beliefs. The coherent network of experiences, beliefs, and actions is consistent with rational consumer choice.
That is rationality at the margin, of course, as the entire practice of bottled water in developed countries strikes me as not rational for most people. Tap water is fine and to me even tastes better.
Hat tip goes to www.bookforum.com.