In this episode of Lehigh University’s College of Business ilLUminate podcast, we are speaking with Muzhe Yang about his research examining the connection between prenatal exposure to lead-contaminated drinking water in Newark, N.J., and adverse birth outcomes. We also discuss the policy implications of his research findings for other cities across the nation that are confronting similar contamination in their tap water from aging lead pipes.
Yang holds the Charles William McFarlane Professorship in Economics in Lehigh's College of Business. His research aims to provide empirical evidence on causal relations that have policy implications. For more information, listen to this March 2021 podcast in which Yang discussed his previous research on factors affecting maternal, fetal and infant health.
He spoke with Jack Croft, host of the ilLUminate podcast. Listen to the podcast here and subscribe and download Lehigh Business on Apple Podcasts or wherever you get your podcasts.
Below is an edited excerpt from that conversation. Read the complete podcast transcript.
Jack Croft: Your study looks at the lead-in-water crisis in Newark, N.J. How did the water contamination there first come to light, and how bad was it?
Muzhe Yang: The very first indication of the water contamination happened in March 2016. At that time, routine water testing found 30 public schools in the city of Newark had lead levels in drinking water above the EPA regulation threshold, which is 15 parts per billion. After that event, and throughout the year 2017, more testing results in the city revealed high levels of lead in drinking water. One statistic showed that more than 22% of drinking water samples exceeded the EPA regulation threshold.
Now, with more testing results coming out, a pattern also emerged. And the pattern is that the violations were concentrated in the western part of the city. And then later on, the city commissioned an engineering firm called CDM Smith to conduct an independent investigation about the water crisis. The report was released in October 2018, and it found that the city, specifically the western part of the city, had continuously violated the EPA regulation about lead in drinking water. I read that report and the report helped me figure out my research design for identifying a causal effect of lead exposure on health.
Croft: In your study, you discuss how the water crisis in Newark provided, and I'll quote here, "a unique natural experiment," unquote, to study prenatal exposure to lead-contaminated drinking water on fetal health. So what was it about the crisis in New Jersey's largest city that made it a unique natural experiment?
Yang: It is unique in the sense that we have two groups of people where one group was exposed to lead in drinking water in an unexpected way while the other group was not. In other words, the Newark water crisis provided an exogenous variation in the lead exposure. We economists often use the phrase “natural experiment” just to describe an empirical setting where the exogenous variation is not obtained through any purposely designed randomized controlled trials, but resulting from certain events that happened in the real world.
What makes Newark's water crisis unique is that the city is served by two, not by one, water treatment plants. And this allowed us to do a within-city, not cross-city, comparison. And here, the argument is that, well, it is possible for people to choose where to live. It is not very possible for people to choose where to live based on what water treatment plants they get. If this is true, then we can say that people living close to the border separating the service areas of the two water treatment plants can be very similar only except for the water treatment plant they get. This is similar to a randomized controlled trial, but it happens naturally in the real world. The border separating the service areas of the two water treatment plants essentially plays the role of randomly assigning city residents into two groups.
Croft: What were the key findings of your study?
Yang: We find that the prenatal lead exposure increased the chance of low birth weight by about 18% and also increased the chance of preterm birth by about 19%. These numbers do not represent correlations, but rather causal relations, that is, the effects due to lead exposure alone, not due to other factors. So these are the key findings of the study.
Croft: What are the main public policy implications of your research on Newark's lead-in-tap-water public health crisis?
Yang: I would say what happened in Newark may be just the tip of an iceberg. The main policy implication of our study is that replacing all lead water pipes being used in the U.S. water system should be done as soon as possible. It is not a question of whether we should do it or not, but a question of how quickly we can do it. In our study, we mentioned that high levels of lead had already been found in the tap water in cities other than Newark. We listed a few in our paper and they are Baltimore, Chicago, Detroit, Milwaukee, New York, Pittsburgh, and Washington D.C. So in summary, replacing all lead water pipes should be done as soon as possible.
Croft: There are those who say that the cost to replace old lead pipes across the country is just too expensive. So how does that cost compare to the lifetime cost for society associated with preterm births?
Yang: We did a cost-benefit analysis in our study taking the lifetime cost of preterm birth into account. Our analysis is only for the city of Newark, so all the numbers I'm about to mention are just for this city alone. According to our calculation, the cost savings from avoiding increased preterm birth because of the lead exposure can be somewhere between $90 million and $160 million. This benefit is roughly the same order of magnitude as the replacement cost of lead water pipes. And the cost was estimated to be somewhere between $90 million and a $180 million.
I also want to emphasize that the cost-saving estimates we did could be an underestimate. This is because we only considered the benefit from avoiding bad health outcomes. There are other benefits coming from avoiding other undesirable outcomes. For example, lead exposure among children has been found to reduce their school performance, increase their antisocial behaviors, and even increase their criminal behaviors. If we take those benefits into account, then the total benefit is likely to exceed the total cost of replacing all lead water pipes.
So here, I want to say that the cost of replacing the lead water pipes shouldn't be viewed only as an expenditure, it should also be viewed as an investment. And it is also an investment for our children's future.
Croft: And finally, what should politicians, policymakers, and the public—the people who live in places where they have lead in their tap water or may develop lead in their tap water as [infrastructure] continues to age—what should they all take away from your study?
Yang: The infrastructure bill passed by the Congress, I would say, really gave hope for finally solving the problem of lead water pipes. The bill was passed in November 2021, and it includes a funding of $15 billion for lead pipe replacement. It is a concrete step, but still, it is just the first step. So what I really want to emphasize is this: Policymakers and the public, especially at the local level, probably want to pay close attention to the actual progress of the replacement work.
And we just cannot wait too long. Time flies. The bill was passed in November 2021 and more than one year has already gone. We are now in 2023. I really hope we can get work done soon. And I hope the study we did can help those decision-makers understand the importance and also the urgency of replacing all water pipes that are made of lead as soon as possible.
As I have just said, the replacement cost shouldn't be viewed only as an expenditure. It should also be viewed as an investment. And it is also an investment for future generations.