Panels A and B reflect the classic hedonic model, with fixed housing stock. Land Rents, Local Productivity, and the Total Value of Amenities, Watersheds in Child Mortality: The Role of Effective Water and Sewerage Infrastructure, 1880 to 1920, Failure to Act: The Economic Impact of Current Investment Trends in Water and Wastewater Treatment Infrastructure, Mostly Harmless Econometrics: An Empiricists Companion, Subjective vs. The analysis includes plants that never received a grant (which have all event study indicators 1[Gp,y = 1] equal to 0), plants that received a single grant (which in any observation have only a single event indicator equal to 1), and plants that received more than one grant (which in any observation can have several event indicators equal to 1). We also explored estimates controlling for city-year population or city-year municipal revenue. To analyze how Clean Water Act grants affected home values, we use a difference-in-differences estimate comparing the change in the log mean value of homes within a 0.25-, 1-, or 25-mile radius in any direction of the downstream river, before versus after the plant receives a grant, and between plants receiving grants in early versus late years. The product is a tablet that turns any type of substance into clean substance. In 1969 Ohio's Cuyahoga River was so fouled by industrial pollution that the river caught on fire. The Clean Water Act was produced as a means for the EPA to implement pollution control programs alongside setting water quality standards for all contaminants in surface waters. Each grant significantly decreased pollution for 25 miles downstream, and these benefits last for around 30years. Row 8 equals row 1 divided by 30 times row 6. These estimates are within a standard deviation of one, so fail to reject the hypothesis that the municipal wastewater investment exactly equals the cost listed in the grant project data.20. The wastewater treatment plants that are the focus of this article also receive effluent permits through the NPDES program, so our analysis of grants may also reflect NPDES permits distributed to wastewater treatment plants. The gradual effect of the grants is unsurprising since, as mentioned earlier, the EPA estimates that it took 2 to 10 years after a grant was received for construction to finish. These full data show more rapid declines before 1972 than after it. We assume that housing markets are competitive and that each consumer rents one house. These estimates divide treatment plants into 10 deciles of the number of housing units in 2000 within 25 miles of downstream river segments. This tells us little about the Clean Water Acts effects, however, since its investments may take time to affect water pollution, expanded during the 1970s, and may be effective even if not obvious from a national time series. Problem with enforcement. A second question is scope. Standard errors are clustered by watershed. The change in the value of housing is estimated by combining the regression estimates of TableV with the baseline value of housing and rents from the census. One possible channel is that wages change to reflect the improvement in amenities (Roback 1982). Fifth, the 25-mile radius is only designed to capture 95% of recreational trips. Fourth, this analysis abstracts from general equilibrium changes. pH increased by 0.007pH units a year, meaning that waters became more basic (less acidic). Column (4) implies that each grant increases mean home values within 25 miles of affected waters by 0.024 percentage point. Adler Robert W., Landman Jessica C., Cameron Diane M.. Angrist Joshua D., Pischke Jrn-Steffen, Artell Janne, Ahtiainen Heini, Pouta Eija, , Boscoe Francis P., Henry Kevin A., Zdeb Michael S., , Carson Richard T., Mitchell Robert Cameron, , Currie Janet, Zivin Joshua Graff, Meckel Katherine, Neidell Matthew, Schlenker Wolfram, , Deschenes Olivier, Greenstone Michael, Shapiro Joseph S., , Faulkner H., Green A., Pellaumail K., Weaver T., , Gianessi Leonard P., Peskin Henry M., , Jeon Yongsik, Herriges Joseph A., Kling Catherine L., Downing John, , Kahn Matthew E., Li Pei, Zhao Kaxuan, , Keiser David A., Kling Catherine L., Shapiro Joseph S., , Kling Catherine L., Phaneuf Daniel J., Zhao Jinhua, , Leggett Christopher G., Bockstael Nancy E., , Lipscomb Molly, Mobarak Ahmed Mushfiq, , Muehlenbachs Lucija, Spiller Elisheba, Timmins Christopher, , Muller Nicholas Z., Mendelsohn Robert, , Muller Nicholas Z., Mendelsohn Robert, Nordhaus William, , Olmstead Sheila M., Muehlenbachs Lucija A., Shih Jhih-Shyang, Chu Ziyan, Krupnick Alan J., , Peiser Richard B., Smith Lawrence B., , Poor P. Joan, Boyle Kevin J., Taylor Laura O., Bouchard Roy, , Smith Richard A., Alexander Richard B., Wolman M. Gordon, , Smith V. Kerry, Wolloh Carlos Valcarcel, , Steinwender Astrid, Gundacker Caludia, Wittmann Karl J., , Wu Junjie, Adams Richard M., Kling Catherine L., Tanaka Katsuya, , Oxford University Press is a department of the University of Oxford. Why farmers and ranchers think the EPA Clean Water Rule goes too far - PBS Second, this city-level difference-in-differences estimate cannot use the upstream-downstream comparison for identification. Keiser thanks the USDA for funding through the National Institute of Food and Agriculture Hatch project number IOW03909. Effects of Clean Water Act Grants on Water Pollution: Event Study Graphs. Our approach focuses on the effects of cleaning up an individual site and is not as well suited to capture the potentially distinct effects of cleaning up entire river systems. Adding rental units in column (3) barely changes this estimate. The simplest specification of column (1), which includes rivers with water quality data, implies that it cost |${\$}$|0.67 million a year to increase dissolved oxygen saturation in a river-mile by 10%; the broadest specification of column (3), which assumes every treatment plant has 25 miles of downstream waters affected, implies that it cost |${\$}$|0.53 million a year. Q_{pdy} & =\sum _{\tau =-10}^{\tau =25}\gamma _{\tau }1[G_{p,y+\tau }=1]d_{d}+X_{pdy}^{^{\,\,\prime }}\beta +\eta _{pd}+\eta _{py}+\eta _{dwy}+\epsilon _{pdy}. We discuss a range of pass-through estimates including these for cost-effectiveness and cost-benefit analysis. Data cover the years 19622001. Panel C estimates the effect of grants on log housing units and Panel D on the log of the total value of the housing stock. Finally, we note one similarity between air and water pollution that may be relevant to policy design. One involves declining returns to abatement of pollution from point sources. At the same time, much oxygen-demanding pollution comes from agriculture and other nonpoint sources, and those sources have remained largely unregulated. Asterisks denote p-value <.01 (***). Agricultural Sediment Control, Environmental Regulations, Air and Water Pollution, and Infant Mortality in India. It is possible that areas with more pollution data may be of greater interest; for example, FigureI, Panel C shows more monitoring sites in more populated areas. \end{equation*}. As we approach the formal 50 th Anniversary of the Clean Water Act (CWA) next month, the Association of Clean Water Administrators (ACWA), which represents state clean water regulatory agencies, has partnered with EPA's Office of Water to create a " Clean Water Act Success Stories Map ." \end{align}, To estimate the pass-through of Clean Water Act grants to local expenditure, we regress cumulative municipal sewerage capital expenditures, \begin{equation} Connected dots show yearly values, dashed lines show 95% confidence interval, and 1962 is the reference category. Standard errors are clustered by watershed. This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (. Iowa State and Center for Agricultural Research and Development. Data on industrial water pollution in the 1960s is less detailed, though manufacturing water intake (which is highly correlated with pollution emissions) was flat between 1964 and 1973 due to increasing internal recycling of water (Becker 2016). Wetlands, Flooding, and the Clean Water Act - Resources for the Future Engineering calculations in USEPA (2000c) suggest that the efficiency with which treatment plants removed pollution grew faster in the 1960s than in the 1980s or 1990s. Effects of Clean Water Act Grants on Housing Demand. The bottom decile of counties, for example, includes ratios of measured benefits to costs of below 0.01. This early version of the CWA left sanitation planning up to the surgeon general, and allowed the Federal Works Administration to help local and state governments with prevention and cleanup efforts. The negatives is it is not strongly enforced, violators only pay a small fine, countries can exempt themselves from certain species. Before The Clean Water Act. We use the following equation to assess year-by-year changes in water pollution: \begin{equation} Column (1) reports a basic difference-in-differences regression with nominal dollars. Choosing Environmental Policy: Comparing Instruments and Outcomes in the United States and Europe, Contingent Valuation: From Dubious to Hopeless, Nor Any Drop to Drink: Public Regulation of Water Quality. *The Clean Water Program, which calls for $790 million for municipal-treatment improvements, nonpoint-source-control projects, aquatic-habitat restoration and implementation of management plans. TableIII presents estimates of cost-effectiveness. Second, measuring cost-effectiveness is insufficient to reach conclusions about social welfare; Section VII discusses peoples value for these changes. Because no reference category is required in this kind of event study setting, where one observation can receive multiple treatments, for ease of interpretation, we recenter the graph line so the coefficient for the year before treatment ( = 1) equals 0. We also report event study graphs of outcomes relative to the year when a facility receives a grant: \begin{align} Online Appendix F discusses other reasons we believe have weaker support. In the presence of such general equilibrium changes, our estimates could be interpreted as a lower bound on willingness to pay (Banzhaf 2015). Another possible channel involves ecology. Misperception would be less important if most benefits of surface water quality accrue through recreation or aesthetics, since failing to perceive water pollution through any means would mean its effects on recreational demand are limited. Flint, Michigan, has recently had high lead levels in drinking water due to switching its water source from the Detroit River to the Flint River. 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