United States
               Environmental Protection
               Office of Policy
               Planning and Evaluation
               Washington DC 20460
Reducing Lead
in  Drinking Water:
A  Benefit Analysis
December 1986
Draft Final Report

                Ronnie Levin
Office  of Policy,  Planning and  Evaluation
  U.S.  Environmental  Protection Agency

             Draft  Final Report
               December 1986
             U,5. Environmental Pretcctwn
             rtegion 5, Library (PL-12J)
             77 West Jackson Boulevard, 12th Fta*
             Chicago, II  60604-3590


     The Safe Drinking Water Act (SDWA), passed by the U.S.

Congress in 1974, requires the U.S. Environmental Protection

Agency (EPA) to protect public health by setting drinking water

standards for public water supplies.*  Two levels of protection

are described in the SDWA.  Primary drinking water regulations,

applicable only to public water systems, control contamination

that may have an adverse effect on human health by setting

either a maximum contaminant level (MCL) or a treatment technique

requirement.  Secondary drinking water standards are non-enforce-

able recommendations concerning the aesthetic quality of drinking

water, e.g., taste or smell.

     The National Primary Drinking Water Regulations (NPDWR)

were first promulgated at the end of 1975.  EPA revises those

regulations by setting maximum contaminant level goals (MCLGs)

and related MCLs.  MCLGs are non-enforceable health-based goals,

intended to protect against known or anticipated adverse health

effects,  with an adequate margin of safety.  MCLs are enforceable

limits,  to be set as close as feasible to the MCLG; feasibility

includes cost and technological constraints.   MCLs are proposed

at the same time as the MCLGs.

     On November 13, 1985, EPA proposed National Primary Drinking

Water Regulations (NPDWR) to set MCLGs for 28 synthetic organic

chemicals,  11 inorganic chemicals,  and 4 microbiological parameters
*  Defined in the Act as water systems serving 25 or more people
   or having at least 15 service connections.

in drinking water; these substances are listed in Table 1.   The

proposed MCLGs for probable human carcinogens were set at zero, and

MCLGs for other substances were based upon chronic toxicity and

other data.

     Lead is included among the inorganic substances proposed for

regulation in the NPDWR.  The current MCL for lead is 50 micrograms

of lead per liter of drinking water (ug/1);* the proposed MCLG is

20 ug/1.

     The 1986 Amendments to the Safe Drinking Water Act contain a

provision banning the use of materials containing lead in public

water supplies and in residences connected to public water supplies.

States have until June 1988 to begin enforcing this ban.

A.  Summary of Study

     This analysis estimates some of the benefits that could result

from reducing exposure to lead in community drinking water supplies.

These benefits are probably much greater than those attributable to

just reducing the MCL for lead, but do reflect benefits attainable

with reduced exposure to lead  through changes in  the MCL coupled

with changes in  EPA's monitoring requirements or  other efforts  to

reduce exposure  to lead from drinking water.

     There  are two primary categories of benefits evaluated  in

this paper:  the  public health benefits of reduced  lead exposure
 *   This  is equivalent  to  and can be  stated alternatively as  0.05
    milligrams  per  liter  (mg/1), 0.05 micrograms/gram  (ug/g), or
    50  parts  per billion  (ppb).

TABLE 1.  Substances Included in-the 1985 Proposed National
          Primary Drinking Water Regulations (Maximum Contaminant
          Level Goals)	
A.  Synthetic Organic Chemicals

    1.  Acrylanide                              13.
    2.  Alachlor                                14.
    3.  Aldicarb, Aldicarb sulfoxide and
        Aldicarb sulfone                        15.
    4.  Carbofuran                              16.
    5.  Chlordane                               17.
    6.  Dibronochloropropane              *      18.
    7.  o-,m-Dichlorobenzene                    19.
    8.  cis- and trans-1,2 Dichloroethylenes    20.
    9.  1,2-Dichloropropane                     21.
    10'. 2,4-D                     .              22.
    11. Epichlorohydrin                         23.
    12. Ethylbenzene                            24.

B.  Inorganic Chemicals

    1.  Arsenic
    2.  Asbestos
    3.  Barium
    4.  Cadmium
    5.  Chromium
    6.  Copper
   ' 7.  Lead
    8.  Mercury
    9.  Nitrate and Nitrite
    10. Seleniun

C.  Microbiological Parameters

    1.  Total Coliform Bacteria
    2.  Turbidity
    3.  Giardia
    4.  Pathogenic Viruses
Ethyl ene dibromide
Heptachlor and Heptachlor
Polychlorinated biphenyls
Pentac hlorophenol

and reduced materials, damages relating to the phenomenon of lead's

presence in drinking water — as a corrosion by-product.  In addi-

tion, because the calculation of health benefits depends on the

extent of human exposure, another section presents the available

data on the occurrence of lead in public water supplies, and

presents estimates of the population exposed to drinking water

exceeding the proposed MCLG of 20 ug/1.  In assessing the benefits

of the proposed reduced lead standard, this analysis assumes that

EPA will act to reduce lead levels in tap water, as well as main-

taining the current high guality of water leaving the treatment

plant.  It also relies upon and is sensitive to assumptions about

drinking water use and consumption patterns.

     This analysis estimates the annual benefits for one sample

year, 1988, of lowering the amount of lead permitted from; 50 ug/1
to 20 ug/1.  That one year was chosen because environmental lead

levels will have stabilized following EPA's 1984 phasedown of lead

in gasoline.*

     For comparability, all monetary values are expressed in

constant 1985 dollars.**  The population baseline is the 219.2

million people served by community water systems.
 *   Specifically, this analysis measures effects given  the condi-
    tions on January 1,  1988, when EPA's proposed ban on leaded
    gasoline will not yet have taken effect.  However,  even  if EPA
    promulgates that ban, the estimates  in this report  will  not
    change significantly.

 **  The 1986 Economic Report of the President to Congress {Table B-4)

1.  The Occurrence of Lead in Public Drinking Water

     Lead occurs in drinking water primarily as a corrosion

by-product; its sources are the materials used in the distri-

bution and residential plumbing systems (cf sources as diverse

as the EPA Air Quality Criteria Document for Lead, 1986; Craun

and McCabe, 1975; Kuch and Wagner, 1983; Lead in (British) Drinking

Water, 1977; etc).  Water leaving the water treatment plant is

usually relatively lead-free.  However, pipes and solder

containing lead are corroded by water, and lead levels at the

user tap can be much higher than those found at the treatment

plant.  While the presence of lead service pipes and mains is

relatively restricted geographically in the United States, the

use of lead solder (and flux) is ubiquitous.  And the combination

of copper pipes with solder containing lead found in most house-

holds can result in high lead levels* in first drawn water that

has been in contact with the pipe for a period of time — levels

exceeding the current MCL, even with fairly non-corrosive waters

(e.g., Nielson, 1976).  In particular, newly-installed solder is

easily dissolved, and people l-iving in new housing, or in older

housing but with new plumbing, are especially at risk of high

levels of lead in the drinking water (Sharrett et al., 1982;

Murrell, 1985).  In general, lead concentrations in fully flushed

water typical of distribution system water, even under corrosive
*   This results from galvanic corrosion, which is the corrosion
    that occurs when 2 metals, with different electro-chemical
    potential, are in the same environment.

conditions and with new solder,  are generally below 50 ug/1 and

usually below 20 ug/1.

     Because lead occurs generally as a corrosion by-product in

U.S. community water supplies, levels in fully-flushed water and in

distribution water are typically low.  Exposure to lead, however,

is from tap water that can contain significant amounts of lead.

The estimate of occurrence, therefore, is based upon data collected

and analyzed for EPA's Office of Drinking Water in 1979-81.  These

data portray partly flushed (30  seconds), kitchen tap samples

collected by the Culligan water-softening company;* J. Patterson

of the Illinois Institute of Technology analyzed the data.  Current

evidence indicates that these samples are more representative of

consumed water than are the fully-flushed samples taken in compli-

ance with EPA's monitoring regulations.  The Culligan data indicate

that 16 percent of partly flushed water samples could exceed an

MCL of 20 ug/1 at the kitchen tap.  The findings from this data

source are consistent with other analyses of the occurrence of

lead in tap water and with studies of lead leaching rates in

corrosive and non-corrosive waters.

     To this must be added the inhabitants of housing built within

the past 24 months and that have plumbing materials containing lead

Many studies have shown that new solder can release significant

amounts of lead into water, even exceeding the current MCL of 50

ug/1 (e.g., Sharrett et al., 1982; Internal Corrosion of Water
*  The use of company names and the presentation of related data
   does not constitute endorsement of their services.

 Distribution  Systems,  1985).  While corrosive waters have the

 highest  lead  levels,  relatively  non-corrosive waters can' also

 leach  significant  amounts  of  lead.  The highest  lead contamination

 levels occur  with  the newest  solder  (i.e.,  during  the  first  24

 months following installation),  but those  levels decline and are

 generally  not elevated beyond five years  (e.g.,  Sharrett et  al.,

 1982;  Lassovszky,  1984).

     There  were 1.7 million new housing starts and  permits in the

 United States during  1983  and 1.8 million  in 1984.*  Construction

 data show  that housing'typically takes six months  to a year  from

 permit to  potential occupancy, so there are currently  about  3.5

 million  new housing units  (i.e.,  < 24 months).   The Statistical   '

 Abstract of the United States (1985) indicates  that the average

.household  contains 2.73 individuals  (Table 58).  Multiplied

 together,  a total  of  9.6 million people currently  live in new


     However, not  all of these people are  served by community water

 supplies:   of the  current  (1985) U.S. residential  population of

 over 240 million,  219.2 million  are  served by community water

 systems  and this analysis  only addresses  that population.   In

 addition,  data from the plumbing supply industry show  that  about

 8 percent** of new plumbing is plastic, so 92 percent  of the
 *    Survey of Current Business,  U.S.  Department of Commerce -
     Bureau of Economic Analysis,  1985;  Table on New Housing

 **  This  is the average of claims by  the Plastic Pipe Institute
     presented in Mruk (1984)  and of the Copper Development
     Association presented in  Anderson (1984).


population has metal pipes.  Therefore,  the number of people at

risk of high lead levels from new solder in new housing is:

                   219 mil
         9.6 mil x 240     x .92 = 8.1 million.

     To calculate the risk to inhabitants of older housing,  subtract

the number in new housing (8.8 million)* from the total served by

community water systems (219.2 million); that indicates that 210.4

million people live in older homes.  Based upon the Culligan data,

16 percent of them (33.7 million) are at-risk of high lead levels

from partly flushed water at the kitchen tap.  Combining the data

from Culligan on lead levels in older housing with the new housing

exposure estimates indicated that 41.8 million people using public

water supplies currently may be exposed to some water that exceeds

the proposed MCL of 20 ug/1; we round this to 42 million..

     This may be a low estimate

        0  because it does not include the potential exposure
           of occupants in housing built within the past 2-5 years
           (who also probably remain at greater risk of elevated
           lead levels);**

        0  because we have not included those who, while living
           in older housing, have recently had major plumbing
           repairs and so are also at risk of the potentially high
           lead levels associated with newly installed solder;

        0  because the Culligan data represent water that is
           harder than average, whereas high lead levels are
           often found with soft waters; and
                          219 mil
*   Derived:   9.6 mil x  240     = 8.8 million people.

**  Inhabitants of 2-5 year old housing are not included in this
    analysis because it was not possible to eliminate them from the
    base and thus avoid double-counting.

        0  because the data used are for partially flushed
           samples,  while some people (especially children)
           may consume water that is closer to first-flush
           or standing samples (which is more likely to
           contain higher concentrations of lead).*

     In addition,  we have not included any data from the estimated

60 million people  served wholly or in part by private and non-

community water supplies.

     There are uncertainties, however, concerning actual patterns

of drinking water  use and the extent of plastic piping in new

construction that  would reduce the estimate.  Early enforcement

of the Safe Drinking Water Act ban on the use of materials

containing lead in public water supplies, enforceable in June

1988, could also decrease exposure to lead from drinking water.

     The assumptions on the relationship between water lead levels

and blood lead levels are taken from the draft (EPA) Water Criteria

Document for Lead  (1985), which is based upon the recommendations

in the Air Quality Criteria Document for Lead (1986).  Those

documents assume a linear relationship, at least at the lower blood

lead levels typical of the United States, with different constants

for children and adults.  Those formulae are:

     (for children)t pbB** = 0.16*** x intake of lead from water

     (for adults)  PbB** = 0.06*** x intake of lead from water.
*   Water standing in pipes has a greater opportunity for lead to
    leach into it and, therefore, is more likely to contain higher
    lead levels.

**  PbB = blood lead level

*** These constants have a unit of micrograms-of-lead/deciliter-of-
    blood per microgram-of-lead-in-water/day, or ug/dl per ug/day.

t  This formula was derived from Ryu, 1983.  An alternative
   estimate from the data in that paper suggests a coefficient of
   about 0.4.

 Alternative assumptions  (e.g., those reasonably derived from the

 results of Richards and  Moore,' 1982 and 1984) could imply that

 exposure — and consequently benefits — may be underestimated,

 possibly by several factors.

     The estimates of the health benefits associated with this pro-

 posed rule rely on data  on the distribution of blood lead levels in

 children and adults collected as part of the Second (U.S.) National

 Health and Nutrition Examination Survey (NHANES II), a 10,000

 person representative sample of the U.S. non-institutionalized

 population, aged 6 months to 74 years.  That data base is available

 from the (U.S.) National Center for Health Statistics and analyses

 of lead-related data from it have been published before (e.g.,

 Annest et al., 1980 and  1982; Mahaffey et al. , 1982; Pirkle and

 Annest, 1984).

 2.  Benefits of Reducing Children's Exposure to Lead

    Elevated blood-lead  levels have long been associated with

 neurotoxicological effects and many other pathological phenomena:

 an article on lead's neurotoxicity was published as early as 1839,

 on anemia in the early 1930s, on kidney damage in 1862, and on

 impaired reproductive function in 1860.  As noted in the Air

 Quality Criteria Document for Lead (1986),  from an historical

 perspective,' lead exposure levels considered acceptable for

 either occupationally-exposed persons or the general population

have been revised downward steadily as more sophisticated bio-

  medical techniques  have shown formerly-unrecognized biological

  effects,  and as concern has  increased regarding the medical  and

  social significance of such  effects.   In the most recent downward

  revision of maximum safe levels  for children,  the Centers for

  Disease Control (CDC)  lowered its  definition of lead toxicity to

  25 micrograms of lead  per deciliter of blood (ug/dl,  the standard

  measure of blood lead  level)  and 35 ug/dl of free erythrocyte

  protoporphyrin (FEP).   As evaluated in the Criteria Document

  (1986),  the present literature shows  biological effects  as low

  as 10  ug/dl (for heme  biosynthesis) or 15 ug/dl (for certain

•  renal  system effects and neurological alterations);  indeed,  a

  threshold has not yet  been found for  some effects (e.g.,  elevated

  levels of a potential  neurotoxin*  or  stature effects,  Angle  et

  al., 1982; Schwartz et al.,  1986).

      There is no convincing  evidence  that lead has any beneficial

  biological effect in humans  (Expert Committee on Trace Metal

  Essentiality,  1983; and included in the Criteria Document,  1986).

      Elevated blood-lead levels  have  been linked to a wide range

  of health effects,  with particular concern focusing on young

  children.   These effects range from relatively subtle changes

  in biochemical measurements  at 10  ug/dl and below,  to severe

  retardation and even death at very high levels (80-100 ug/dl).

  Lead can  interfere  with blood-forming processes,  vitamin D

  metabolism,  kidney  function,  neurological processes and  repro-
  *   ALA,  or  aminolevulinic  acid.


ductive functions in both males and females.   In addition,  the

negative impact of lead on cognitive performance (as measured by

IQ tests,  performance in school, and other means) is generally

accepted at moderate-to-high blood-lead levels (30 to 40 ug/dl

and above), and several studies also provide evidence for possible

attentional and IQ deficits, for instance, at levels as low as

10-15 ug/1.  Changes in electroencephalogram readings, as another

example, have also been observed at these low levels.  For many

subtle effects, the data may represent the 'limits of detectability

of biochemical or other changes, and not necessarily actual

thresholds for effects.

     For children's health effects, two categories of benefits

were estimated monetarily:  1) the avoidance of costs for medical

care for children exceeding the lead toxicity level set by the

Centers for Disease Control (i.e., -25 ug/dl, when combined with

FEP levels of > 35 ug/dl) and 2) the averting of costs due to

lead-induced cognitive effects.  Two alternative methods for

valuing the potential cognitive damage resulting from exposure to

lead were developed.  The first of these two alternatives involves

assessing the costs of compensatory education to address some of

the manifestations of the cognitive damage caused by  lead as a

proxy measure for the damage  itself.  The second relates to one

specific indication of that cognitive damage --  potential IQ

point loss, and includes  a  calculation of decreased  expected

future  earnings as a function of  10 point decrement.  These esti-

mates neither include many  major  categories of pathophysiological


effects (e.g., renal damage), nor do either the medical costs

or the compensatory educatio-n costs consider any lasting damage
no.t reversed by medical treatment or compensatory education.  These

estimates also attribute few benefits to reducing lead levels in

children whose blood lead levels would be below 25 ug/dl even in

the absence of the rule.

     The estimate, of reductions in medical care expenses rely upon

published recommendations (Piomelli et al., 1984) for follow-up

testing and  treatment for children with blood lead levels above 25

ug/dl.  The  costs of such medical services and treatment were

estimated at about $950 per child over 25 ug/dl (1985 dollars).

This average reflects both lower costs for most of these children

and much higher costs for the smaller subset requiring chelation


     The estimates for compensatory education assumed three years

of part-time compensatory education (de la Burde and Choate, 1972

and 1975) for 20 percent of the children above 25 ug/dl, averaging

about $2,800 (1985 dollars) per child above that blood lead level

based upon data from the U.S. Department of Education (Kakalik

et al., 1981) .

     There is extensive literature examining the relationships

between IQ,  educational levels attained, demographic variables and

earnings (ICF, 1984).  The results of that literature were used to

estimate the effect of 10 point losses that can occur as a part of

the cognitive damage caused by lead exposure upon expected future

earnings: one 10 point can directly and indirectly affect earnings

by 0.9 percent.  The studies of cognitive damage presented in


the Air Quality Criteria Document for Lead (U.S.  EPA,  1986)  show

evidence that blood lead levels of 15-30 ug/dl can be  associated

with IQ losses of 1-2 points,  blood lead levels of 30-50 ug/dl

can be associated with IQ losses of 4 points, and over 50 ug/dl of

blood lead can correlate with losses of 5 points.  Data from the

Census Bureau on expected future lifetime earnings, deferred for 20

years* at a 5 percent real discount rate and then annualized, yield

estimated benefits of avoided damage from reduced exposure to lead.

This alternative method for valuing some of lead's cognitive damage

indicated that society could save $1,040 per child brought below 15

ug/dl; $2,600 per child brought below 30 ug/dl; and $2,850 per

child brought below 50 ug/dl by reducing lead in drinking water

(1985 dollars).

     In sum, this analysis indicates that the proposed rule could

produce benefits of $27.6 million annually in avoided  medical

expenses; $81.2 million per year in reduced compensatory education

costs; and $268.1 million per year in increased lifetime earnings,

based upon sample year 1988; these estimates are in 1985 dollars.

Note that compensatory education and affected earnings are alter-

native methods for valuing aspects of the cognitive damage caused

by lead.**
*  These costs are deferred because those suffering the effects are
   children and will not enter the work force for up to 20 years.
   Obviously, using the largest deferral period (20 years) reduces
   the value of the benefit and reduces the benefit estimate,
   whereas 8- or 10-year-old children may begin working within 8
   years and so would have a much shorter deferral period.  This
   biases the estimates downward slightly.

** This also biases the results downward because there is a strong
   rationale for considering these effects as additive.


     In addition, benefits potentially derived by decreasing the

 incidence of two other categories of health effects (lead's adverse

 effect upon children's growth and fetal effects) were not estimated

 in dollar terms.  Assuming that pregnant women are distributed

 proportionately throughout the country, data from the Census Bureau*

 on birth rates and demographic distributions indicate that 24 per-

 cent of the total population is women of child-bearing age (15-44)

 and that the birth rate is 67.4 births per 1,000 women aged 15-44.


          41.8 million x 24% x 67.4 per thousand =680,000.

 It is estimated that this proposed rule could prevent 680,000

 fetuses from being exposed to elevated lead levels.  The fetal

effects are particularly important, because several recent studies

have shown that lead exposure within the normal range (6-20 ug/1)

can be associated with various negative pregnancy outcomes (such as

early membrane rupture and even miscarriages, e.g., Moore, 1982;

Wibberly et al., 1977), and with low birth weight, inhibited post-

natal growth and development (e.g., Bornschein, 1986;  Bellinger,

1985 and 1986; Dietrich et al., 1986).   In addition, this proposed

rule could prevent 82,000 children from risk of growth effects.

3. Blood-Pressure-Related Benefits and Other Adult Health Effects

   Lead has long been associated with elevated  blood pressure, but

until recently most of the studies have focused only on hyperten-

sion and relatively high lead levels typically  found only in those

occupationally exposed to lead.   Several recent studies, however
   Statistical Abstracts (1986), Tables 27 and 82.


(e.g., Pirkle et al., 1985? Harlan et al.,  1985;  Pocock,  1984 and

1985), have found a continuous relationship between blood lead and

blood pressure.  These studies provide evidence for a small (com-

pared to other risk factors) but robust relationship after control-

ling for numerous other factors known to be associated with blood

pressure.  Experimental animal studies in several species of rats

and pigeons also provide evidence of a relationship between

moderate blood-lead levels and increases in blood pressure.

     To calculate these benefits, logistic regression equations

were used to predict how reducing exposure to lead in drinking

water would affect the number of hypertensives in the U.S. popu-

lation.  These estimates cover only males aged 40 to 59,  because

the effect of lead on b.lood pressure appears to be stronger for men

and because the correlation between blood pressure and age is much

smaller in this age range, reducing the potential for confounding

due to the correlation between blood lead and age.  The estimates

rely upon 1) site-adjusted coefficients from analyses of the MHANES

II data relating blood lead levels to increases in blood pressure*

and 2) coefficients relating blood pressure increases to more serious

cardiovascular disease outcomes, based on data from the Framingham

Study  (McGee et al., 1976) and Pooling Project (1976), as confirmed

by Levy et al., 1984.

     Levy has demonstrated that  the risk coefficients from the

Framingham Heart Study, when coupled with the observed reductions

in blood pressure, smoking, and  cholesterol in the U.S. population
* The specific coefficients and the basis  for their derivation are
  described in the Addendum to the Criteria Document,  1986, which
  is included in volume 1 of that publication.


during the 1970s, correctly predicts the observed reductions in

cardiovascular mortality in the overall population during that

decade.  The Pooling Project showed that the Framingham coefficients

adequately predicted cardiovascular outcomes (such as strokes and

heart attacks) in the other five large prospective heart studies

performed in the U.S.  Therefore, while caution is clearly warranted

in view of the limited data on the effect of lowering blood lead

levels on blood pressure, use of the regression coefficients from

the Framingham Study provide a reasonable basis by which to predict

potential changes in cardiovascular outcomes associated with blood

pressure changes due to decreased lead exposure.

     Based upon this information, reducing exposure to lead from

drinking water in 1988 could reduce the number of male hypertensives

(aged 40 to 59) by 130,000.  Using estimates of the costs of medical

care, medication, and lost wages, such a reduction in hypertension

incidence would yield a value of $250 per year per case avoided  (1985


     These estimates of how blood pressure reductions would affect

the incidences of various cardiovascular diseases were based on

projections of changes in blood pressure as a result of the proposed

rule and estimates of the relationships between blood pressure and

heart attacks, strokes, and deaths from all causes.  As noted

earlier, the latter estimates were derived from several large

epidemiological studies, primarily the Framingham study.  However,

because those studies included very few nonwhites, the estimates

were further restricted to white males, aged 40 to 59.  Thus, the

benefits estimates do not include middle-aged, nonwhite males.


     The basis of .most of the medical costs are the cost-of-illness

estimates presented in Hartunian et al., 1981, which were adjusted

in three ways to reflect current conditions.  First, we inflated

them to 1985 dollars using data from the 1986 Economic Report of

the President to Congress.  Second, we adjusted the costs to reflect

changes and improvements in medical treatment, including the trip-

ling in the incidence rate of. coronary bypass operations that

occurred between 1975 and 1982.  Third, Hartunian used a 6 percent

real discount rate to present-value future expenditures, while

this analysis uses a 10 percent real discount rate.

     The value of reductions in heart attacks and strokes was based

on the cost of medical care and lost wages for nonfatal cases.

Expected fatalities from heart attacks and strokes were included

in the-estimate of deaths from all causes.  That procedure yielded

benefits of $65,000 per heart attack avoided and $48,000 per stroke

avoided (1985 dollars) for the 240 heart attacks and 80 strokes

estimated to likely be avoided in 1988 because of this proposed

rule.   It is important to note that these estimates do not account

for any reductions in the quality of life for the victims of heart

attacks and strokes (e.g., the partial paralysis that afflicts

many stroke victims).

     Valuing reductions in the risk of death is difficult and con-

troversial, with a wide range of estimates in the literature.

EPA's policy guidelines (U.S. EPA,  1984), for example, suggest a

range of $400,000 to $7 million per statistical life saved.  Using

$1 million per case,  the benefits of reduced mortality dominate our

estimates of total blood-pressure-related benefits; these total


 $240 million in 1988 for the 240 deaths estimated as likely to

 be avoided in that year.  Altogether, the monetized benefits of

 reducing adult male exposure to lead in drinking water are

 estimated to total $291.9 million per year (in 1985 dollars),

 using 1988 as a sample year.

     In addition, because lead crosses the placental barrier and is

 a fetotoxin,  pregnant women exposed to lead are at risk of compli-

 cations in their pregnancies and damage to the fetus.  (Fetal

 effects are discussed above, under children's health effects.)

 While we have not monetized any of these reproductive effects, as

 noted above,  680,000 pregnant women per year probably receive

 water that exceeds the proposed standard of 20 ug/1, and would

 benefit from the proposed rule.  Lead-induced effects on male

 reproductive functions have also been discussed in the scientific

 literature but are not included in this report.

 4.   Benefits of Reduced Materials Damage

    A third category of monetized benefits relates to the phenom-

 enon of lead's presence in drinking water:  it is a product of the

 corrosive action of water upon the materials of the distribution

 and residential plumbing.  For the most part,  therefore,  treatment

processes used to reduce high levels of lead in drinking water are

 the same as treatment processes used to reduce the corrosion poten-

tial of the water.   Reducing corrosion damage will produce substan-

 tial benefits to water utilities,  their rate-paying customers,  and

building owners.


     Published estimates of the costs of corrosion damage range

from $12 to $46 per person per year (1985 dollars),  and are sum-

marized in Table 2.  Estimates of the costs that can be avoided by

corrosion control measures range from 20-50 percent of total

damage.  The point estimate of avoidable corrosion costs (i.e., the

benefits of corrosion control) is $8.50 per capita annually (1985

dollars).  For comparison, estimates of average corrosion treatment

costs range from under $1 per person per year (based upon the

experience in Boston and Seattle, cities currently treating their

highly corrosive waters) to almost $5 per person per year (based

upon the highest treatment costs presented in the ODW cost

report).*  As a point estimate, we assumed per capita annual treat-

ment costs of $3.80 (1985 dollars).

     Estimates of the extent of corrosive water also vary.  A

commonly accepted profile is that developed by the U.S. Geological

Survey in the early 1960s, which identified the Northeast,

Southeast, and Northwest sections of the country as having the

softest and most corrosive waters (Durfor and Becker, 1964a and

1964b).  The combined populations of those states are 67.7 million

people (1980 census).  Assuming that these areas are served

proportionately by community water systems,** 61.8 million people
*  The range, however, is quite wide and highly sensitive to system
   size.  These represent average costs.  In some very small
   systems (i.e., serving 25-100 people), costs may be many times

** Of the total population of about 240 million, 219.2 million
   people are served by community water systems.

TABLE 2.  Estimates of Annual Per Capita Corrosion Damage (1985 dollars)
Kennedy Engineers
Hudson & Gilcreas
Kennedy Engineers
Bennett et al.
(cited in Ryder,
Energy & Environ-
mental Analysis
Ryder (1980)
Kirmeyer & Logsdon

Estimated Annual Corrosion Damage
(per capita)





Annual Per
Capita Benefits
of Corrosion
W/OUT EEA $8.82
Assumpt ions/Notes
Assumed 30% potential reduction
in corrosion damage and that dis-
tribution costs were one-third of
total costs.
They did not include increased
operating costs. Per capita
estimate assumes 200 million
people are served by public water
systems. Assumed that distri-
bution costs were one-third of
total costs.
They calculated $6.17 per capita
in savings to residence owners.
Assumed residential costs were
two- thirds of total costs.
Assumed that 200 million people
are served by public water systems
and that distribution costs were
one- third of total costs.
This is an admitted underestimate:
it includes only damage to pipes
(not damage to water heaters,
increased operating costs, etc.)
Ryder ascribed 95% of corrosion
damage to private owners.
Assumed residential costs were
two- thirds of total damage.

      These estimates have been calculated  by the  authors of this  paper.   Assumptions  are  noted  above.

would benefit from actions to reduce the corrosivity of their water,

That figure, multiplied by $8.50 per person, yields annual benefits

from reduced corrosivity of $525.3 million (1985•dollars).

5.    Summary of Benefits of Reduced Lead in Drinking Water

     This analysis of the benefits of reducing exposure to lead

in drinking water indicates that the monetized annual benefits

could range from $926.0 to $1,112.9 million (1985 dollars) for

sample year 1988.  In addition, there are numerous health benefits

of reduced exposure to lead that are not monetized.  The annual

monetized benefits are summarized in Table 3, and the non-monetized

benefits are presented in Table 4.

     Based upon the latest cost "estimates used by the Office of

Drinking Water* the projected benefits exceed the costs' by about

4:1.  Expressed differently, lowering the MCL to 20 ug/1 could

produce annual net benefits of about $800 million in 1988.

     It should be emphasized that considerable uncertainty is

associated with these estimated benefits, uncertainties derived

both from the current state of knowledge concerning lead health

effects and the valuation of avoiding such effects.  Other

analogous efforts to estimate benefits associated with reducing

lead in drinking water may be useful in helping to  judge how

reasonable these present benefit estimates are.
*  These calculations use preliminary EPA Office of Drinking
   Water cost estimates.  Costs and net benefits will be
   discussed more extensively in other documents associated
   with this proposed rulemaking.

TABLE 3.   Summary of Estimated Annual Monetized Benefits of Reducing  Exposure
           to Lead from 50 ug/1 to 20 ug/1 (1985 dollars) for Sample Year 1988
Estimated population exposed to drinking
water exceeding proposed MCL
                                              42 million*
Children's health benefits

     -reduced medical costs

     -reduced costs of cognitive damage
      Method 1 - compensatory education
      Method 2 - decreased future earnings
Method 1
                                              $27.6 million
 $81.2 million
$268.1 million

$108.8 million
$295.7 million
Adult health benefits (males only)

     -reduced hypertension savings
      (males, aged 40-59)

     -savings fron fewer heart attacks
      (white males, aged 40-59)

     -savings from fewer strpkes
      (white males, aged 40-59)

     -savings from fewer deaths
      (white males, aged 40-59)


Materials benefits

     -benefits of reduced corrosion damage
                                              $32.5 million

                                              $15.6 million

                                               $3.8 million

                                             $240.0 million

                                             $291.9 million

                                             $525.3 million

     -Method 1 - using compensatory education

     -Method 2 - using decreased future earnings


                                             $926.0 million

                                           $1,112.9 million

                                             $230.0 million

                                     about   $800 million
* Total population served by conmunity water systems:   219 million

TABLE 4.  Summary of Estimated Annual Non-monetized Benefits of Reducing
          Exposure to Lead from 50 ug/1 to 20 ug/1 for Sample Year 1988
Estimated population exposed to drinking
water exceeding proposed MCL
Children's health benefits

   - children requiring medical treatment

   - loss of 1-2 IQ points
               4 IQ points
               5 IQ points

   - children requiring compensatory education

   - children at risk of stature decrement

   - fetuses at risk

   - increased risk of hematological effects
Reductions in Nunfoers
  of People at Risk

  42 million*





Adult health benefits

     -cases of hypertension
      (males, aged 40-59)

     -heart attacks
      (white males, aged 40-59)

      (white males, aged 40-59)

      (white males, aged 40-59)

     -(reduced risk to pregnant women
      ((women, aged 15-44)
      (same as fetuses

     -reduced risk of reproductive effects
      (women, aged 15-44)





* Total population served by community water systems:  219 million

B.   Boston Case Study

     In the spring of 1986, Jonathan Jacobson analyzed the incre-

mental costs and benefits to the City of Boston of reducing the

lead MCL from 50 ug/1 to 10 ug/1.*  That analysis, carried out as a

masters thesis project at Harvard University, focused on Boston as

a city with high potential for increased lead exposure via drinking


    Boston's water is highly corrosive:  it is.relatively acidic

(pH = 6.7) and soft (14 mg/1 of CaCC>3), and has low alkalinity

(Karalekas et al.,  1975).  Boston also has a large percentage of

lead pipes in service.  During the 1970s, several studies found

high lead levels in Boston's drinking water (e.g., Karalekas et

al.,  1975; and several internal studies conducted by the

Massachusetts Water Resources Authority and the [Boston]

Metropolitan District Commission).

     To reduce the high lead levels, 'Boston began corrosion

control treatment.   Monitoring performed by EPA's Region I from

1975 to 1981 indicated that lead,  iron and copper levels dropped

significantly (Karalekas et al.,  1982).  However, while lead

concentrations generally decreased to below the current MCL of

50 ug/1, additional treatment will be necessary to comply with

a lowered MCL.

     Jacobson analyzed the incremental annual costs and benefits

of additional efforts by Boston to control further the corrosivity
* He assumed a lowered MCL of 10 ug/1 because that is the

  feasibility limit for current treatment and technology.


of its water, using sample years 1988 and 1992, and estimating all

costs in 1985 dollars.  His analysis assumed the following:

           compliance will be measured by a standing "grab" sample,
           that is, a sample taken immediately after turning on
           the faucet at any random time during the day after an
           unknown period of standing;

        0  it will be impossible for every tap to meet the lowered
           MCL, even using state-of-the-art treatment,  and so
           samples should be averaged; and

           that,  while the effectiveness of specific treatment
           procedures varies in not-yet-well-understood ways when
           actually used in the field,- corrosion control is ulti-
           mately feasible with current state-of-the-art methods.

     Jacobson, using data from EPA Region I and the Massachusetts

Water Resources Authority, calculated the benefits of additional

2-stage treatment for Boston's water:  further raising the pH (to

reduce the acidity of the water) and installing several pumping -

stations to maintain a consistent concentration of sodium hydroxide

throughout the system.

     Jacobson used the same categories of monetized health benefits*

as those described in this EPA analysis,  except that he did

not include the estimates of cognitive damage associated with

decreased future  earnings.  His estimates of materials benefits

rely only upon the Kennedy Engineers (1978) study and information

in the American Water Works Association Corrosion Manual (1985).

     His results,  summarized in pages 36-39 of his study,  indicate

incremental costs of $700,000 per year (using sample year 1988) and

incremental annual benefits of $7.9 million (including estimated
* For blood-pressure-related estimates,  however, he used the non-
  site-adjusted coefficients from the NHANES II contained in
  Pirkle et al.,  1985.

health benefits of '$6.9 million and materials benefits of

$950,000; based upon sample year 1988).  This yields estimated

net annual benefits of $7.2 million and a benefit to cost ratio

of 11:1 (compared to the estimate of 4:1 in this analysis).

     It is unclear, however, whether or how these results can be

extrapolated to other U.S. water systems and cities, and

therefore, to this proposed rule.

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