Declining water quality can impact theeconomy in various ways. Impacts can be found in the healthsector, where labor productivity can be affected, inagriculture, where the quality and quantity of food producedcan be reduced, and in tourism, real estate,aquaculture/fisheries and other sectors which rely onenvironmental quality and ecosystem services. Despite thesewell-known impacts, finding economy-wide affects of waterquality on economic activity can be elusive. In this paperwe attempt to fill this gap by using a conventionalempirical approach in contemporary environmental economicsand new data on economic activity and water quality fornineteen countries from 1990-2014. The authors find thatwhen rivers become very heavily polluted, regions downstreamsee reductions in economic growth, losing between 0.8 and2.0 percent of economic growth. These losses imply that inmany places, the costs of environmental degradation areseverely under-estimated and well above efficient levels.
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