Consequences of the Clean Water Act and the Demand for Water Quality

91 Pages Posted: 13 Jan 2017

See all articles by David Keiser

David Keiser

Resource Economics

Joseph S. Shapiro

University of California, Berkeley; National Bureau of Economic Research (NBER)

Multiple version iconThere are 4 versions of this paper

Date Written: January 12, 2017


Since the 1972 U.S. Clean Water Act, government and industry have invested over $1 trillion to abate water pollution, or $100 per person-year. Over half of U.S. stream and river miles, however, still violate pollution standards. We use the most comprehensive set of files ever compiled on water pollution and its determinants, including 50 million pollution readings from 170,000 monitoring sites, to study water pollution’s trends, causes, and welfare consequences. We have three main findings. First, water pollution concentrations have fallen substantially since 1972, though were declining at faster rates before then. Second, the Clean Water Act’s grants to municipal wastewater treatment plants caused some of these declines. Third, the grants’ estimated effects on housing values are generally smaller than the grants’ costs.

Keywords: Clean Water Act, Pollution Regulation, Water Quality, Cost Benefit Analysis, Cost Effectiveness Analysis, Hedonic Models, Fiscal Federalism, Infrastructure

JEL Classification: H23, H54, H70, Q50, R31

Suggested Citation

Keiser, David and Shapiro, Joseph S., Consequences of the Clean Water Act and the Demand for Water Quality (January 12, 2017). Cowles Foundation Discussion Paper No. 2070, Available at SSRN: or

David Keiser

Resource Economics ( email )

Resource Economics
Amherst, MA 01003
United States

Joseph S. Shapiro (Contact Author)

University of California, Berkeley ( email )


National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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