In this thesis, I investigate the relationship between two different water monitoring options, and their impact on optimal water treatment and health. To see whether one monitoring option has an advantage compared to the other, I build a theoretical model of the differences between real-time continuous monitoring and test-based monitoring of water quality. I use the model to investigate how the expected utility of the consumer is affected by the initial probability of contamination in drinking water, the effect from chlorine, the cost of chlorine, and the cost of falling sick relative to the cost of drinking bottled water. I further investigate how parameters affect the difference in expected utilities for the consumers between the two monitoring options. The result show that the monitoring option with the lowest cost of contamination in the drinking water yields the highest expected utility. The difference in utilities between the monitoring options decreases with a high efficiency of chlorine, and increases with a high cost of chlorine, a high initial level of contamination in the water or a high difference between the cost of falling sick and the cost of bottled water.