Water innovation and water governance: Adaptive responses to regulatory change and extreme weather events

Abstract

This paper investigates the effect of federal and state level regulatory changes with respect to drinking water quality, water pollution and water quantity in the United States on the level of relevant technological innovation. We construct and use a unique dataset covering major amendments and additions to regulated contaminants lists as stipulated in the legislative acts most relevant to the policy area we study, along with a list of technological patents pertaining to water quality and quantity over a period of more than 30 years. We find in general the impact of water regulation on innovation to be both statistically and economically significant.