Abstract:
In January 2001, on the last day of the term of President William Clinton, the US Environmental Protection Administration (EPA) had reduced the maximum permissible level of arsenic in drinking water from 50 to 10 parts per billion (ppb). Incoming President Bush had quickly suspended the new arsenic standard and other last minute Clinton regulations to allow time for review. In October 2001, after nine months of study, Bush's EPA Administrator, Christine Whitman had to decide what the arsenic standard should be.
Learning Objective:
This case is intended for use in a graduate course in applied microeconomics to illustrate the issues in setting an environmental standard, including the problems of quantifying benefits and the possibility of local instead of national standards.
