Do industries pollute more in poorer neighborhoods? Evidence from toxic releasing plants in Mexico

This paper provides evidence that poorer communities in Mexico are associated with higher toxics pollution releases. We utilize previously unused, self-reported, plant-level annual databases (2004 to 2012) and the Urban Marginalization Index (IMU for its Spanish acronym) published by Mexican government's National Population Council (2000, 2005 and 2010). We cover seven toxic pollutants (arsenic, cadmium, chromium, cyanide, lead, mercury and nickel) that are most frequently reported and have significant negative health impacts on the affected population. We conduct the analysis at the local level of AGEBs (à rea Geoestadística Básica Urbana) that are roughly comparable to census tracts in the US, but only for urban areas. We find that the burden of pollution is disproportionately borne by less prosperous communities in Mexico, although the difference is not always statistically significant. From our most recent and most reliable cross-section, the coefficients indicate that a plant with a one-unit higher IMU is predicted to emit about 87% more cyanide, 72% more arsenic and chromium and 57% more nickel, than one in the average community. The quantile regressions show that this positive relationship between marginalization and pollution can be mostly explained by the response of plants at the higher end of the pollution distribution, as the coefficients are always positive and statistically significant for the higher percentile regressions.