Arsenic contamination of drinking water and mental health

This paper investigates the effect of drinking arsenic contaminated water on mental health. Drinking water with an unsafe arsenic level for a prolonged period can lead to arsenicosis and associated illness. Based on rich and newly collected household survey data from Bangladesh, we construct several measures for arsenic contamination that include the actual arsenic level in the respondent's tubewell (TW), and past institutional arsenic test results as well as their physical and mental health. To account for potential endogeneity of water source, we take advantage of the quasi-randomness of arsenic distribution and employ the pre-1999 use of TW as an instrument and structural modelling as alternatives for robustness checks. We find that suffering from an arsenicosis symptom is strongly negatively related to mental health, even more so than from other illnesses. Calculations of the costs of arsenic contamination reveal that the average individual would need to be compensated for suffering from an arsenicosis symptom by an amount of money over 10 percent of annual household income.