Is GiveWell underestimating the health value of lead eradication?

By Jakob @ 2022-08-21T15:13 (+33)

[EDIT: after responses from GiveWell in the comments, I believe that the answer to the question in the title is "NO". I have left the post up for future reference, but now believe that GiveWell's rough estimate for the health value of lead eradication is a very good guess.]

In 2021, GiveWell decided to support Pure Earth, an organization working on reducing lead exposure in low- and middle income countries. In support of this grant, GiveWell modeled the impacts of the grant on the future incomes of the beneficiaries in detail. They also made a "rough guess" about potential health impacts of the grant, adjusting the total benefits up by 20% (arguing that "we thought it was unlikely they would change our decision to recommend this grant"). In this post I argue that health benefits of lead poisoning are likely to make up a ~2x larger share of the total than the 16.7% implied by GiveWell's rough guess (derived by taking 20%/(100%+20%)), and that lead abatement therefore can be somewhat more cost effective.

Why work to reduce lead exposure?

For a quick introduction to how lead is harmful, consider reading explainers by Our World in Data or Vox, or a more detailed report by Rethink Priorities or Pure Earth. In short, lead harms cognitive development in children, reducing their future expected earnings, and it increases rates of cardiovascular disease, leading to increased health burdens and premature deaths. 

According to Attina (2013), the economic costs in lower- and middle income countries (LMICs) corresponded to 1.2% of global GDP in 2011 (with most concentrated impacts in Africa at >4% of regional GDP). According to the IHME Global Burden of Disease database (accessed through Our World in Data), the disease burden from lead exposure was ~22 Mn DALYs in 2022 (of which 94% is in LMICs), which compares to 2.5 Bn DALYs lost in total (so around 0.9% of the global burden). 

There is uncertainty around these numbers, and the Rethink Priorities Lead Exposure Report has argued that the health burden could be 30-100% larger while the economic burden is only 30-50% of the estimated magnitude. However, for this article, I'll assume that the numbers above are correct. Furthermore, I'll assume that the split between economic impacts and health impacts for the most effective interventions corresponds to the global aggregate split; though I briefly discuss in the summary that the most effective interventions may actually have a skew towards more economic benefits.

 Estimating the relative impacts on health and incomes

Let's start by estimating the value, within the GiveWell framework, of avoiding the health burden linked to lead exposure. GiveWell measures the value of improved health in units of doubling consumption, which makes it a bit hard to translate directly from a DALY number to a $ number. I will therefore use $100k/DALY value that the Open Philanthropy GHW team uses, assuming that the two organizations are closely value-aligned. This leads to a potential value of $2.2 Tn from avoiding the health impacts of lead poisoning, of which ~$2.0 Tn are linked to LMICs. There is some delay between when GiveWell would fund an intervention, and when the beneficiaries would experience better health, so this value should be discounted using GiveWell's 4% discount rate. However, "about 99% of the amount of lead taken into the body of an adult will leave in the waste within a couple of weeks", according to Barry (1975), so this is unlikely to change the value by a lot.

By comparison, the economic value of eradicating lead poisoning in LMICs could be around 1.20% of GDP, or around $1.1 Tn using the World Bank estimate of $94 Tn global GDP in 2021 in nominal terms. Since the 1.20% number is from 2011, this is likely slightly too low - the health burden has increased by 3% since 2011, and the economic burden has likely increased faster, since LMICs are growing faster than the global average. One further nuance is which currency you choose to use - with ~9% inflation in the US this year, it matters which year you're using as a reference for your dollar estimates. For now, I will generously assume that these factors bring the economic value up to $1.5 Tn/year.

As mentioned, GiveWell focuses on logarithmic increases in income, which means that each dollar is worth more if it is used to increase incomes of the globally poor. How poor are people affected by lead poisoning? Based on World Bank data on GDP per capita and the Global Disease Burden data on lead poisoning health burden, I estimate that the typical person affected by lead poisoning has an income of $3.8-6.7k per year. The higher number represents the weighted average GDP per capita, using the total disease burden in each country as weights, and assuming that lead exposure affects a representative sample of people within each country. However, poor people may be more effected by lead exposure, and this estimate does not capture the variance in incomes among the affected people. As a rough proxy, I therefore also calculated the weighted average logarithmic income of the affected people, resulting in the $3.8k number. These numbers are roughly one order of magnitude less than the $50k number used as a benchmark by Open Philanthropy.

You may now think that this would drive the economic value of eradicating lead poisoning to ~$15 Tn or so (using the order-of-magnitude scaling factor to the $1.5 Tn number; if instead comparing $50k to the exact values of $3.8-6.7k yields a range of $11.2-19.7 Tn), but economic gains from eradicating lead poisoning are lagged by many years. GiveWell assume that it takes 15 years for a child exposed to lead to join the workforce, and that the impacts are distributed over 40 years. Using a 4% discount rate, this means that the average value of a dollar 15-55 years into the future is just $0.27. Therefore, I estimate that the economic value of eradicating lead is around $4 Tn (0.27* $15 Tn). 

Summary

Based on the calculations above, eradication of lead exposure in LMICs would be worth roughly $4 Tn/year in economic outcomes and $2 Tn/year in improved health outcomes. Health outcomes are therefore ~33% of the overall value linked to lead exposure eradication, or a ~50% uplift compared to only the economic value.^[1]

If the higher multiplier of 50% had been used instead, the estimated cost effectiveness of the Pure Earth grant would have increased from 18x to ~24x that of cash transfers. By comparison, the best AMF program is estimated at a cost-effectiveness of ~15x cash transfers. Lead exposure can therefore be cost competitive with top GiveWell interventions regardless of which multiplier is used for the value of health outcomes, but the difference to AMF is ~3x larger if the higher health value is used.

1. ^{^}

   Note that this corresponds to what GiveWell estimates in a separate model, where they argue that the total burden of exposure to lead leads to 94 Mn of their units of value, of which 31 Mn (which corresponds exactly to the former number of 33% of the value, or a 50% uplift compared to the economic value) are linked to health outcomes. 

   I'm not sure why the two separate GiveWell models use different relative shares for health benefits and economic benefits; it's possible that different lead abatement interventions may have slightly different profiles (e.g., lead pollution in communities with many kids may have higher economic returns per DALY averted, since the future incomes of a larger number of kids is affected; furthermore, these interventions are likely to be among the most cost-effective ones), but I have not seen GiveWell or others argue this.