Stephanie Franz: The correlation between economic growth and water pollution

Research has shown that the growth of a nation’s economy harms its air quality, at least until citizens live uncomfortably enough to demand change. Does the same hold true for water pollution? Stephanie Franz examined that question in an undergraduate research project during her senior year at Elon.

“I have a passion for the environment, and its interaction with the economy is something we have to consider, especially now,” she says.

Under the guidance of professor Steve DeLoach in the Department of Economics and using data from the World Bank and the United Nations, Franz compared economic figures with self-reported statistics on water pollution from 72 developed and developing countries, seeking to determine how trade liberalization affects water pollution. Her findings break with conventional wisdom.

“With water pollution, you can’t expect it to start declining as a country develops,” Franz said.

She discovered that a country does not have to be a democracy for the government to respond to demands for better water quality. Another point of interest emerged from the research as well. Industrial production is often assumed to be less clean than other production methods, Franz said, but she found that for water pollution, producing more industrial goods than agricultural goods actually reduces pollution in some cases.

How much does this research matter if there is no connection between economic growth and water pollution, or between levels of freedom and pollution? Her academic mentor believes it means a lot.

“While it is always more fun to find a simple, easy-to-understand result, the fact that there is little to conclude out of the data is every bit as interesting and important,” DeLoach said. “Ultimately, it makes me question some of the seminal work that others have done because I have a suspicion that there are methodological problems with those studies.”

Franz, an Illinois native and Honors Fellow, started her studies in Elon’s School of Communications, but when she traveled to China in 2009, she discovered a passion for economics. Where journalists report on what others discover, researchers generate the original material, Franz said.

“Economics has an interesting take on what drives human behavior,” she said. “It can be so interdisciplinary. It’s applicable to almost everything,” including the environment.

Franz presented her research at the 2011 Spring Undergraduate Research Forum and the Eastern Economics Association’s annual conference. She plans to return to China to teach English.