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Forcing Firms to Think About the Future: Economic Incentives and the Fate of Hazardous Waste

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Author Info
Anna Alberini ()
Shelby Frost

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Abstract

What is the cost of off-site hazardous waste disposal? In addition to paying for disposal fees and shipments costs, generators of hazardous waste can potentially be held liable for the cost of cleanup if the waste disposal site contaminates the environment after closure or abandonment and thus falls under the federal or state Superfund legislation. This paper empirically examines the sensitivity of individual hazardous waste generators to these categories of costs, exploiting the variation across states in factors influencing disposal costs, and in the structure of the liability imposed on waste generators under certain circumstances by state laws. We fit nested logit models to predict the waste management method (incineration or landfill disposal) and the state of destination for shipments of halogenated solvent waste used for metal cleaning in manufacturing and reported in the Toxic Release Inventory in 1988–1990. Waste generators respond to transportation costs and to proxies for current disposal costs. Generators also find the concurrent presence of strict and joint-and-several liability a deterrent, but this deterrent effect does not vary with the wealth of the firm or the volume of the waste shipped. Copyright Springer Science+Business Media, Inc. 2007

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File URL: http://hdl.handle.net/10.1007/s10640-006-9037-8
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Publisher Info
Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 36 (2007)
Issue (Month): 4 (April)
Pages: 451-474
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Handle: RePEc:kap:enreec:v:36:y:2007:i:4:p:451-474

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Web page: http://www.springerlink.com/link.asp?id=100263

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords: hazardous waste; liability; nested logit; Q53; Q58; K32;

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Haab, Timothy C. & Hicks, Robert L., 1997. "Accounting for Choice Set Endogeneity in Random Utility Models of Recreation Demand," Journal of Environmental Economics and Management, Elsevier, vol. 34(2), pages 127-147, October. [Downloadable!] (restricted)
    Other versions:
  2. Arik Levinson, 1999. "State Taxes and Interstate Hazardous Waste Shipments," American Economic Review, American Economic Association, vol. 89(3), pages 666-677, June. [Downloadable!] (restricted)
  3. Sigman, Hilary, 1996. "The Effects of Hazardous Waste Taxes on Waste Generation and Disposal," Journal of Environmental Economics and Management, Elsevier, vol. 30(2), pages 199-217, March. [Downloadable!] (restricted)
  4. T. Randolph Beard, 1990. "Bankruptcy and Care Choice," RAND Journal of Economics, The RAND Corporation, vol. 21(4), pages 626-634, Winter. [Downloadable!] (restricted)
  5. Alberini, Anna & Austin, David, 1999. "On and Off the Liability Bandwagon: Explaining State Adoptions of Strict Liability in Hazardous Waste Programs," Journal of Regulatory Economics, Springer, vol. 15(1), pages 41-63, January. [Downloadable!] (restricted)
    Other versions:
  6. Steven Shavell, 1984. "A Model of the Optimal Use of Liability and Safety Regulation," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 271-280, Summer. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hilary Sigman, 2003. "Taxing Hazardous Waste: The U.S. Experience," Departmental Working Papers 200306, Rutgers University, Department of Economics. [Downloadable!]
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