EGC affiliate Mark Rosenzweig and coauthors combine economics, genetics, and family lineages to show the direct effects of arsenic-contaminated water on cognition, physical strength, and earnings.
The contamination of groundwater by arsenic in Bangladesh is the largest poisoning of a population in history. While its health effects have been widely studied, the economic impacts had not been rigorously analyzed until now.
Mark M. Pitt, Mark R. Rosenzweig, and M. Nazmul Hassan (2021). The Review of Economic Studies 88. 5: 2479–2526.
In an effort to provide clean drinking water and reduce water-borne disease, the government of Bangladesh began a massive initiative to dig tube wells throughout the 1970s and 80s. The program was successful in reducing the incidence of such diseases while boosting other positive health outcomes such as increases in average body-mass index (BMI) and height.
Decades later, with 95% of the population utilizing well water, the groundwater obtained from these tube wells was found to be contaminated with arsenic in 59 out of the country's 64 districts. Roughly 92 million people had been chronically exposed to toxic levels of arsenic at levels higher than international standards set by the World Health Organization.
Getting the true productivity effect has previously been neglected in the literature, so the key thing here was to get at the causal impact of arsenic.
While the health implications of this crisis have been researched and reported, the effects on economic indicators such as productivity, cognitive capabilities, income, and schooling attainment had yet to be studied until now.
This new article, by Mark Rosenzweig of Yale Department of Economics and EGC and coauthors Mark M. Pitt of Brown University and M. Nazmul Hassan of University of Dhaka, is the first economics study that uses molecular genetics research to identify the direct effect of arsenic retention on economic outcomes.
“Reading the existing literature, it’s all about correlation,” Rosenzweig said. “We’re not the first to measure concentrations of arsenic in people’s bodies in Bangladesh and its correlation with economic outcomes, but using the molecular genetics identification strategy, we can get to the causal effect.”
Usually, to be able to demonstrate the causal effects of a variable – be it a harmful or beneficial one – on health and economic outcomes, researchers need to randomly sort subjects into treatment and control groups, then compare outcomes for those groups. In this case, however, it is not possible to test for the effects of arsenic poisoning with randomized treatments.
Arsenic retention in the body could be impacted by the decisions that the individual made based on information about contaminated wells or on food prices and availability. These other factors could influence the outcome being measured, complicating a case for causality. “The challenge is that the amount of arsenic that people ingest is endogenous – what foods they use, where the well is, and so on,” Rosenzweig said. “That’s the challenge of getting the causal impact.”
To overcome this hurdle, the researchers utilized information on individual arsenic retention within family lineages and the genetic linkages between family members who reside in different villages throughout Bangladesh. By utilizing this information, the researchers could create an instrumental variable to isolate and measure the true effect of individual arsenic retention on outcomes like productivity and cognition.
“There are three alleles associated with the methylation of arsenic, so if you have these particular alleles, you’ll be able to methylate arsenic, that is, secrete it out,” Rosenzweig said. “Because there are these genes, there’s going to be family correlations of this ability to methylate.”
“The instrument is using their lineage – their families’ stock of arsenic – to predict their own level of arsenic,” Rosenzweig explained. “The variation in arsenic retention is going to be affected by the variation in what lineage they’re in.” In addition, the team controlled for other variables that would contribute to the variation in arsenic retention between villages such as the location of arsenic-contaminated wells or local food prices.
But, in order to confirm the validity of this instrument, the team needed to prove two things first.
“One concern is that those three genes may be correlated with cognition directly,” Rosenzweig explained. “For instance, if you have those genes, maybe you’re also smarter.” Thus, the effect would not be from arsenic retention.
To show that this was not the case, the team tested and found no correlation between the alleles that methylate arsenic and other alleles associated with cognition. In addition, Rosenzweig, referencing another study, stated that there is “no correlation between these three genes and the measures of cognition in populations where there’s no arsenic, so we’re confident that these three genes are just about methylation.”
The team also compared populations from before and after the installation of the wells to assess the validity of the instrument. “We have a population of people who chose their level of education before the wells existed. In principle, their level of education is unaffected by arsenic,” Rosenzweig said. “For those people, when we use the instrument to predict arsenic retention on schooling, we should find nothing.” This is exactly what the team discovered.
Rosenzweig and his co-authors utilized this instrumental variable approach with panel data that followed families from 1982 to 2008. By looking at a subsample that included genetically-linked family members who live in different villages, they were able to clearly estimate – for the first time – the significant adverse economic effects of arsenic-contaminated water on Bangladeshi individuals and households.
A key finding of the study was that retained arsenic caused significantly lower performance on cognitive tests as measured by the Raven’s Colored Progressive Matrices Test, widely used in research as a non-verbal measure of intelligence. The team also found that a one standard deviation decrease in arsenic retention increased performance by 24%, one full correct answer on the Raven’s test.
The negative effect of arsenic retention on cognition also manifested in lower schooling attainment, especially for younger men.
In addition to its negative cognitive impacts, retained arsenic levels also lowered the percentage of young men who took on skilled employment, including teachers, doctors, government administrators, and business managers including shopkeepers and farm managers. For these metrics, the team focused on employment outcomes for young men, as opposed to older individuals, because this subgroup had been exposed to arsenic contamination in water prior to making early-life career decisions.
Specifically, the team discovered that the proportion of young men working skilled jobs would grow by 12.2 percentage points – a 24% increase – if the average level of arsenic retention among them were halved.
The study also identified a negative impact of arsenic retention on entrepreneurship. For the purpose of this study, entrepreneurs were defined as individuals who reported any non-farm business income in the previous year.
For young men in 2007, they estimated that, were arsenic levels to be cut in half, the proportion of individuals running a business would increase by five percentage points – a 26% increase.
Another notable finding of the study was the very small identified relationship between retained arsenic levels and body-mass index (BMI) or other conventionally measured morbidities among Bangladeshis. For instance, the team found that doubling arsenic retention would reduce BMI by just 1.7%.
This does not necessarily suggest that arsenic exposure is unrelated to negative health outcomes; rather, it points to the prevalence of such morbidity symptoms across the population due to illness from lack of access to proper sanitation or hygiene. Therefore, it can be difficult to otherwise identify the specific health impacts of arsenic, distinct from other ailments.
In other words, many of the costs of arsenic retention in Bangladesh are oftentimes “hidden.”
The Bangladeshi formal labor market is mostly comprised of male laborers, many of whom are self-employed and work with other male family members. For the male earners in a given household, reducing arsenic retention to levels in the United States would boost productivity – measured by annual earnings – by $54, a 9% increase.
Reducing the levels of arsenic in tubewell water sources may bring about positive economic benefits for women as well, however the results here are not straightforward. Forgoing tubewell water, which contains arsenic, would often require women, who are generally responsible for supplying water to the household, to travel greater distances to access alternative sources. Yet, by boosting home-production productivity among women, lowering the levels of arsenic in tubewell water can free up time. The research team estimated that these benefits win out, and the additional time would lead to an annual additional $13 benefit for women household members.
“It’s actually pretty difficult to visibly discern the symptoms of arsenic poisoning from other ailments for people in Bangladesh, but it could still be affecting them,” Rosenzweig said. “Getting the true productivity effect has previously been neglected in the literature, so the key thing here was to get at the causal impact of arsenic.”
Research Summary by Aiden Lee.