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Around 40% of the districts in Bihar have reported arsenic in groundwater. This comprises more than 67 blocks from 15 districts, covering more than 1600 habitations across the State. High arsenic levels in drinking water have been associated with Arsenicosis and lead to economic costs such as wage loss, cost of disease, loss of wages, and cost of averting activities.We surveyed 388 households from two blocks of Bihar between 2013 and 2014. A field test kit was used to test the arsenic concentration in drinking water collected from 935 hand-pump tube wells. COI was used to measure the indirect value of reduced morbidity through reduction in productivity and wage loss due to contaminated drinking water. The extent of the population exposed to arsenic through drinking water is estimated.The results demonstrate that concentration of arsenic from deep hand-pump tube well water (>160 feet) is less than 10 ppb and is mainly found between the 45–160 feet range, which is the main source of drinking water in the study area. The water test results reveal that 61% of the drinking water contained arsenic in excess of 10 ppb, and 5.03% of the water samples contained arsenic between 300 and 500 ppb. The annual wage loss, cost of treatment, and COI for the sample households are estimated as $46.8, $114.26 and $161.15, respectively. The total annual COI is estimated as $5.11 million for the entire study area.The study estimates the COI for the households due to contaminated drinking water and finds that the poor households are more affected than the higher-income households. Therefore, providing safe drinking water is essential for socioeconomic reasons.