Benefits of Avoiding Nitrates in Drinking Water

Abstract

Nitrate contamination of drinking water is a widespread concern and threatens human health. The magnitude of the health consequences depends on individuals’ ability to avoid exposure. This paper uses an event-study framework to uncover avoidance behavior and infant mortality outcomes following public notifications required by the Safe Drinking Water Act. Using store-level scanner data, I estimate that consumers spend $4.5 million annually on bottled water to avoid nitrate-contaminated drinking water. This protective behavior leads to 20 avoided infant deaths per year or $223 million in monetized benefits. These results underscore the benefits and role of environmental information policy in inducing avoidance of environmental hazards.