IDEAS home Printed from https://ideas.repec.org/a/uwp/landec/v88y2012iii1p518-535.html
   My bibliography  Save this article

Does Ambient Water Quality Affect the Stringency of Regulations? Plant-Level Evidence of the Clean Water Act

Author

Listed:
  • Lopamudra Chakraborti
  • Kenneth E. McConnell

Abstract

This paper provides evidence that the Clean Water Act implemented through effluent limits responded to local water quality. We choose biological oxygen demand as the pollutant and dissolved oxygen as a water quality indicator. We use a panel of permits for 100 plants in Maryland, Virginia, and Pennsylvania for 1990 to 2004. We estimate that decline in water quality by 1 mg/L lowers permits by 5 mg/L. This finding demonstrates greater flexibility than might be expected in an effluent standards–based approach. It suggests efficient resource use, with permits relaxed with water quality improvements and tightened with water quality declines.

Suggested Citation

  • Lopamudra Chakraborti & Kenneth E. McConnell, 2012. "Does Ambient Water Quality Affect the Stringency of Regulations? Plant-Level Evidence of the Clean Water Act," Land Economics, University of Wisconsin Press, vol. 88(3), pages 518-535.
    • Handle: RePEc:uwp:landec:v:88:y:2012:iii:1:p:518-535
    as

    Download full text from publisher

    File URL: http://le.uwpress.org/cgi/reprint/88/3/518
    Download Restriction: A subscripton is required to access pdf files. Pay per article is available.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gray, Wayne B. & Shadbegian, R.J.Ronald J., 2004. "'Optimal' pollution abatement--whose benefits matter, and how much?," Journal of Environmental Economics and Management, Elsevier, vol. 47(3), pages 510-534, May.
    2. John D. McClelland & John K. Horowitz, 1999. "The Costs of Water Pollution Regulation in the Pulp and Paper Industry," Land Economics, University of Wisconsin Press, vol. 75(2), pages 220-232.
    3. McConnell, Virginia D. & Schwarz, Gregory E., 1992. "The supply and demand for pollution control: Evidence from wastewater treatment," Journal of Environmental Economics and Management, Elsevier, vol. 23(1), pages 54-77, July.
    4. James T. Hamilton & W. Kip Viscusi, 1999. "Are Risk Regulators Rational? Evidence from Hazardous Waste Cleanup Decisions," American Economic Review, American Economic Association, vol. 89(4), pages 1010-1027, September.
    5. Earnhart, Dietrich, 2004. "Regulatory factors shaping environmental performance at publicly-owned treatment plants," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 655-681, July.
    6. Freeman, A. Myrick, III, 2001. "Environmental Policy Since Earth Day I: What Do We Know About the Benefits and Costs?," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 31(1), pages 1-14, April.
    7. Michael R. Moore & Elizabeth B. Maclin & David W. Kershner, 2001. "Testing Theories of Agency Behavior: Evidence from Hydropower Project Relicensing Decisions of the Federal Energy Regulatory Commission," Land Economics, University of Wisconsin Press, vol. 77(3), pages 423-442.
    8. Bandyopadhyay Sushenjit & Horowitz John, 2006. "Do Plants Overcomply with Water Pollution Regulations? The Role of Discharge Variability," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 6(1), pages 1-32, January.
    9. John Houtsma, 2003. "Municipal Wastewater Treatment: a Comparison of the Performance of Public Sector and Contract Operated Plants," ERSA conference papers ersa03p381, European Regional Science Association.
    10. A. Myrick Freeman III, 2002. "Environmental Policy Since Earth Day I: What Have We Gained?," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 125-146, Winter.
    11. Dietrich Earnhart, 2004. "Panel Data Analysis of Regulatory Factors Shaping Environmental Performance," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 391-401, February.
    12. Cropper, Maureen L. & William N. Evans & Stephen J. Berard & Maria M. Ducla-Soares & Paul R. Portney, 1992. "The Determinants of Pesticide Regulation: A Statistical Analysis of EPA Decision Making," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 175-197, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chakraborti, Lopamudra, 2016. "Do plants’ emissions respond to ambient environmental quality? Evidence from the clean water act," Journal of Environmental Economics and Management, Elsevier, vol. 79(C), pages 55-69.
    2. Chen, Zhao & Kahn, Matthew E. & Liu, Yu & Wang, Zhi, 2018. "The consequences of spatially differentiated water pollution regulation in China," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 468-485.
    3. Cohen, Alex & Keiser, David, 2016. "The Effectiveness of Overlapping Pollution Regulation: Evidence from the Ban on Phosphate in Dishwasher Detergent," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235533, Agricultural and Applied Economics Association.
    4. Fabien Martinez, 2015. "A Three-Dimensional Conceptual Framework of Corporate Water Responsibility," Post-Print hal-02887624, HAL.
    5. Cohen, Alex & Keiser, David A., 2017. "The effectiveness of incomplete and overlapping pollution regulation: Evidence from bans on phosphate in automatic dishwasher detergent," Journal of Public Economics, Elsevier, vol. 150(C), pages 53-74.
    6. Li, Jing & Shi, Xing & Wu, Huaqing & Liu, Liwen, 2020. "Trade-off between economic development and environmental governance in China: An analysis based on the effect of river chief system," China Economic Review, Elsevier, vol. 60(C).
    7. Elbakidze, Levan & Beeson, Quinn, 2020. "State Regulatory Heterogeneity and Clean Water Act Compliance," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304638, Agricultural and Applied Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chakraborti, Lopamudra, 2016. "Do plants’ emissions respond to ambient environmental quality? Evidence from the clean water act," Journal of Environmental Economics and Management, Elsevier, vol. 79(C), pages 55-69.
    2. Dietrich Earnhart & Dylan G. Rassier, 2016. "“Effective regulatory stringency” and firms’ profitability: the effects of effluent limits and government monitoring," Journal of Regulatory Economics, Springer, vol. 50(2), pages 111-145, October.
    3. Earnhart, Dietrich & Friesen, Lana, 2021. "Use of competitive endogenous audit mechanisms by federal and state inspectors within environmental protection agencies," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    4. Lopamudra Chakraborti, 2020. "Effects of Water Quality Monitoring on Plant-Level Pollution: Evidence from the Clean Water Act," Land Economics, University of Wisconsin Press, vol. 96(3), pages 349-365.
    5. Zach Raff & Dietrich Earnhart, 2018. "Effect Of Cooperative Enforcement Strategies On Wastewater Management," Economic Inquiry, Western Economic Association International, vol. 56(2), pages 1357-1379, April.
    6. Shimshack, Jay P. & Ward, Michael B., 2008. "Enforcement and over-compliance," Journal of Environmental Economics and Management, Elsevier, vol. 55(1), pages 90-105, January.
    7. Mary F. Evans & Scott M. Gilpatric & Jay P. Shimshack, 2018. "Enforcement Spillovers: Lessons from Strategic Interactions in Regulation and Product Markets," Journal of Law and Economics, University of Chicago Press, vol. 61(4), pages 739-769.
    8. Walls, W.D. & Zheng, Xiaoli, 2021. "Environmental regulation and safety outcomes: Evidence from energy pipelines in Canada," Resource and Energy Economics, Elsevier, vol. 64(C).
    9. Earnhart, Dietrich, 2007. "Effects of permitted effluent limits on environmental compliance levels," Ecological Economics, Elsevier, vol. 61(1), pages 178-193, February.
    10. Zach Raff & Dietrich Earnhart, 2020. "The effect of environmental enforcement on labor: environmental workers and production workers," Journal of Regulatory Economics, Springer, vol. 57(2), pages 118-133, April.
    11. Cohen, Alex & Keiser, David A., 2017. "The effectiveness of incomplete and overlapping pollution regulation: Evidence from bans on phosphate in automatic dishwasher detergent," Journal of Public Economics, Elsevier, vol. 150(C), pages 53-74.
    12. Earnhart, Dietrich & Segerson, Kathleen, 2012. "The influence of financial status on the effectiveness of environmental enforcement," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 670-684.
    13. Earnhart, Dietrich & Friesen, Lana, 2017. "The Effects of Regulated Facilities' Perceptions About the Effectiveness of Government Interventions on Environmental Compliance," Ecological Economics, Elsevier, vol. 142(C), pages 282-294.
    14. Tihitina Andarge & Erik Lichtenberg, 2020. "Regulatory compliance under enforcement gaps," Journal of Regulatory Economics, Springer, vol. 57(3), pages 181-202, June.
    15. Raff, Zach & Earnhart, Dietrich, 2019. "The effects of Clean Water Act enforcement on environmental employment," Resource and Energy Economics, Elsevier, vol. 57(C), pages 1-17.
    16. Bandyopadhyay Sushenjit & Horowitz John, 2006. "Do Plants Overcomply with Water Pollution Regulations? The Role of Discharge Variability," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 6(1), pages 1-32, January.
    17. Thomas J. Miceli & Kathleen Segerson & Dietrich Earnhart, 2022. "The role of experience in deterring crime: A theory of specific versus general deterrence," Economic Inquiry, Western Economic Association International, vol. 60(4), pages 1833-1853, October.
    18. Matthew E. Kahn & Pei Li & Daxuan Zhao, 2013. "Pollution Control Effort at China's River Borders: When Does Free Riding Cease?," NBER Working Papers 19620, National Bureau of Economic Research, Inc.
    19. Millimet, Daniel L., 2013. "Environmental Federalism: A Survey of the Empirical Literature," IZA Discussion Papers 7831, Institute of Labor Economics (IZA).
    20. Michela Limardi & Francesca Battista, 2022. "Global Supply Chain Sustainability: the Role of Non-governmental Enforcement Mechanisms," Post-Print halshs-03704334, HAL.

    More about this item

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uwp:landec:v:88:y:2012:iii:1:p:518-535. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: http://le.uwpress.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.