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An empirical study of income growth and manufacturing industry pollution in New England, 1980-1990

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  • Hanna, Bríd Gleeson
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    Abstract

    This paper is an empirical examination of how a community's income growth is affected by polluting manufacturing activity. The hypothesis I test is that this activity has two conflicting effects: first, industrial investment encourages economic growth through the creation of employment and other positive economic spillover effects and, second, the associated pollution causes out-migration of residents. I hypothesize that a community that is initially relatively wealthy will experience relatively more out-migration of its higher income residents, who are assumed to have a lower tolerance for pollution. Thus, such communities will grow less in response to such investment compared to its poorer neighbors. Therefore, in my econometric model the marginal effect of pollution on income growth is allowed to vary with initial incomes. I use a unique data set that incorporates Toxics Release Inventory (TRI) and census tract-level data for New England for the years 1980 and 1990. The estimated effect of pollution on growth is negative, on average, and is more negative in initial incomes. In an effort to measure the out-migration effects of pollution, I use a separate measure of toxic pollution. I find that, holding constant total pollution, 'toxic' pollution has a more negative effect on growth for wealthier communities. These results are consistent with the above hypotheses.

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    Bibliographic Info

    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 67 (2008)
    Issue (Month): 1 (August)
    Pages: 75-82

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    Handle: RePEc:eee:ecolec:v:67:y:2008:i:1:p:75-82

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    Web page: http://www.elsevier.com/locate/ecolecon

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    Keywords: Industrial pollution Economic growth Spatial separation Migration Employment;

    References

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    1. Dinda, Soumyananda, 2004. "Environmental Kuznets Curve Hypothesis: A Survey," Ecological Economics, Elsevier, vol. 49(4), pages 431-455, August.
    2. Gawande, Kishore & Berrens, Robert P. & Bohara, Alok K., 2001. "A consumption-based theory of the environmental Kuznets curve," Ecological Economics, Elsevier, vol. 37(1), pages 101-112, April.
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    12. Gawande, Kishore & Bohara, Alok K. & Berrens, Robert P. & Wang, Pingo, 2000. "Internal migration and the environmental Kuznets curve for US hazardous waste sites," Ecological Economics, Elsevier, vol. 33(1), pages 151-166, April.
    13. Susmita Dasgupta & Benoit Laplante & Hua Wang & David Wheeler, 2002. "Confronting the Environmental Kuznets Curve," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 147-168, Winter.
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    15. John, A. & Pecchenino, R. & Schimmelpfennig, D. & Schreft, S., 1995. "Short-lived agents and the long-lived environment," Journal of Public Economics, Elsevier, vol. 58(1), pages 127-141, September.
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    Cited by:
    1. Bríd G Hanna & Daniel Hatch & Christopher Lominac, 2009. "Exposure to toxic pollution in new york state, 1998," Economics Bulletin, AccessEcon, vol. 29(2), pages 1087-1101.

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