Health costs of arsenic contamination of drinking water in Assam, India

This paper estimates the health costs of arsenic contamination of drinking water in Assam, India, where nearly one million people are affected. Applying the Three Stage Least Square (3SLS) procedure to data collected through a primary survey of 355 households in 2013, it estimates three structural equations to determine health costs due to arsenic contamination. The estimates show that the average annual health cost of a 1 microgram increase in arsenic concentration per liter of drinking water is about INR4 per household. Furthermore, if the average level of arsenic concentration is reduced to the safe limit of 50 microgram per liter, the average annual welfare gain for a household is estimated to be INR 862 (USD 14). Projecting these figures to the entire arsenic-affected population of Assam, the annual health costs of a 1 microgram increase in arsenic concentration per liter are estimated to be about INR 0.76 million (USD 0.01 million) and the welfare gains from reducing the level of arsenic concentration to the safe limit are estimated to be INR 153 million (USD 2.49 million). The results also indicate that these health costs and welfare gains vary significantly across different levels of arsenic concentration and across districts. Finally, the paper draws policy implications for providing safe drinking water in Assam.