It is no secret that the state of infrastructure in US cities is less than stellar—but what are the economic costs of the small deteriorations that citizens incur each day? Individual municipal water systems are responsible for providing clean water for hundreds of thousands of people, but aging pipes lead to water main breaks that not only disrupt water service, but also affect traffic. In some of the most publicized cases, commuters have seen an urban geyser on their already congested commutes.
In a new RFF discussion paper, “Clustered Into Control: Causal Impacts of Water Infrastructure Failure,” we analyze the economic costs of water main breaks on a single outcome: the costs that drivers incur from sitting in unexpected traffic due to water main repairs. Traffic congestion is a growing problem. The number of people on the road already outpaces the growth in transportation infrastructure, frustrating many American commuters every day.
In Washington DC, where some water mains were installed prior to the Civil War, roughly 500 of these mains break each year. Using high-resolution traffic speed data and information on water main breaks received from the DC Water and Sewer Authority, we find an average 1–2 percent decrease in traffic speeds surrounding the location of a water main break. While this effect is statistically significant, it translates to only about $1,350 in congestion costs for the typical water main break—or about $1 per DC resident annually. This estimate is not economically large enough to spur major policy changes.
This is hardly to say that water infrastructure failures aren’t burdening Americans with large direct and indirect costs. Indeed, the American Water Works Association pegs the cost of overhauling America’s water infrastructure at more than $1 trillion. We look only at one impact of localized water infrastructure failures. Other economic costs from lost water resources, flood damages, potential contamination, and the closure of public buildings that are temporarily without functioning water service could be substantial. However, with quick responses by repair crews, water main repairs can often be completed in a matter of hours at relatively low costs, so it may be more effective to fix these breaks as they happen, rather than completing mass system repairs.
To fully value water infrastructure improvements, additional research is needed to assess the impact of centralized water infrastructure failures. Whereas a single water main break affects a relatively small group of people, incidents at a treatment facility, reservoir, or other central water source could affect hundreds of thousands of people at once. Potential losses could be incurred due to the mass closure of public facilities, public health risks, and failure to provide other services related to water (e.g., industrial use, agriculture, and electricity generation). If additional research were to identify the full impacts of these losses, the costs may be enough to encourage policymakers to consider investing more in water infrastructure or identifying ways to better manage such losses.
The authors are grateful for research support from the US Department of Homeland Security (DHS). Findings expressed here do not represent official positions of DHS.
