Water Pollution and Digestive Cancers in China

Saturday, November 1, 2008

Following China’s economic reforms of the late 1970s, rapid industrialization has led to a deterioration of water quality in the country’s lakes and rivers. China’s cancer rate has also increased in recent years, and digestive cancers (i.e. stomach, liver, esophageal) now account for 11 percent of fatalities (WHO 2002) and nearly one million deaths annually. This paper examines a potential causal link between surface water quality and digestive cancers by exploiting variation in water quality across China’s river basins. Using a sample of 145
mortality registration points in China, I find using OLS that a deterioration of the water quality by a single grade (on a six-grade scale) is associated with a 9.3 percent increase in the death rate due to digestive cancer, controlling for observable characteristics of the Disease Surveillance Points (DSP). The analysis rules out other potential explanations for the observed correlation, such as smoking rates, dietary patterns, and air pollution. This link is also robust to estimation using 2SLS with rainfall and upstream manufacturing as instruments. As a consequence of the large observed relationship between digestive cancer rates and water pollution, I examine the benefits and costs of increasing China’s levy rates for firm dumping of untreated wastewater. My estimates indicate that doubling China’s current levies would save roughly 29,000 lives per year, but require an additional 500 million dollars in annual spending on wastewater treatment by firms, implying a cost of roughly 18,000 dollars per averted death.

Avi Ebenstein

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