Don't look now: paying for documented need punishes discovery in US lead-pipe funding

Abstract

The United States allots USD 15 billion for lead service line replacement in proportion to documented lead, the largest of a growing class of environmental-indicator transfers. Reconstructed exactly, the rule prices looking below zero. Resolving an unknown pipe lowers a state's expected allotment in three of the eight jurisdictions we can measure above the statutory floor, and raises it in none. Below it the allotment cannot move. Systems filing nothing are scored lead-free. We prove no fixed formula on self-reported inventories can pay for need without punishing its measurement, so we made an audited one. The unique additive repair credits unknowns at a rate no filing can move, and is strategy-proof. Discovery is repriced from a median loss of USD 48.63 per line per year to zero. Allocation swings fall from 16.5% of the pool to 0.8%, for an audit costing 1.23% of annual funds. The formula's tilt toward vulnerable systems survives.