Willingness to Contribute as a Component of the Social Cost of Water Pollution

Abstract

Individuals contribute significant sums to environmental organizations, such as water-related groups, whose goals are to preserve and improve local water quality. These groups also fundraise to support these goals. However, the social cost of water pollution lacks contributions to water groups and their fundraising expenditures. If contributions and fundraising respond to changes in local water quality, there is a willingness to contribute toward mitigation of water pollution. Social costs should count these values. We provide proof of concept for this argument, showing significant evidence of local water quality affecting contributions to environmental nonprofits, as well as fundraising expenditures. (JEL H41, Q53)