A better cost:benefit analysis yields better and fairer results: EPA’s lead and copper rule revision

Abstract

When conducted on a societal level, cost-benefit analysis (CBA) can indicate policies that best allocate scarce public resources. Done incompletely, CBA can produce spurious, biased results. To estimate the potential health benefits of EPA's recent Lead and Copper Drinking Water Rule Revision (LCRR), we used EPA's exposure, compliance, and effect coefficient estimates to monetize 16 of the health endpoints EPA has determined are causally related to lead exposure. In addition, we monetized one health endpoint that EPA has used elsewhere: preterm birth. We estimated that the total annual health benefits of the LCRR greatly exceed EPA's estimated annual costs: $9 billion vs $335 million (2016$). Our benefit estimates greatly exceed EPA's benefit estimates.There are also nonhealth benefits because lead generally contaminates drinking water through the corrosion of plumbing components that contain lead. The LCRR therefore has 2 components: reducing how corrosive the water is and limited replacement of lead pipes. Reducing corrosion damage to drinking water and wastewater infrastructure and residential appliances that use water yields significant annualized material benefits also: $2–8 billion (2016$). Effectively, the health benefits are free. Finally, while actual exposure data are limited, the available data on lead-contaminated drinking water exhibits known risk patterns, disproportionately burdening low-income and minority populations and women. This economic analysis demonstrates that to maximize national benefits and improve equity, the LCRR should be as rigorous as possible.