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Pollution Abatement and Environmental Equity: A Dynamic Study

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  • Nadezhda V. Baryshnikova

    ()
    (School of Economics, University of Adelaide)

Abstract

We study pollution abatement and environmental equity in a dynamic panel model using data for 236 plants in the US pulp and paper industry observed over the period 1985-1997. We suggest a theoretical model for the plant manager who incorporates regulatory pressures into his calculations of optimal amount of pollution. Assuming actual pollution abatement exhibits a sluggish adjustment process, the theoretical model leads to an empirical AR(1) panel model. We estimate our model using GMM with both ''temporally lagged'' and ''spatially lagged'' instruments. We find that children, people below the poverty line and the smallest minority races are exposed to higher levels of pollution. Our findings show no evidence of environmental inequity against African-Americans or Hispanics, and find that the neighborhoods with a higher percentage of elderly population face signicantly lower levels of pollution from the plants.

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File URL: http://www.economics.adelaide.edu.au/research/papers/doc/wp2010-06.pdf
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Bibliographic Info

Paper provided by University of Adelaide, School of Economics in its series School of Economics Working Papers with number 2010-06.

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Length: 17 pages
Date of creation: May 2010
Date of revision:
Handle: RePEc:adl:wpaper:2010-06

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Postal: Adelaide SA 5005
Phone: (618) 8303 5540
Web page: http://www.economics.adelaide.edu.au/
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Keywords: pollution abatement; environmental equity; dynamic panel; instrumental variable; fixed effects;

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  1. Wayne B. Gray & Ronald J. Shadbegian, 2002. "Optimal Pollution Abatement - Whose Benefits Matter, and How Much?," NBER Working Papers 9125, National Bureau of Economic Research, Inc.
  2. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  3. Brooks, Nancy & Sethi, Rajiv, 1997. "The Distribution of Pollution: Community Characteristics and Exposure to Air Toxics," Journal of Environmental Economics and Management, Elsevier, vol. 32(2), pages 233-250, February.
  4. Manuel Pastor & James L. Sadd & Rachel Morello-Frosch, 2004. "Waiting to Inhale: The Demographics of Toxic Air Release Facilities in 21st-Century California," Social Science Quarterly, Southwestern Social Science Association, vol. 85(2), pages 420-440.
  5. Douglas Anderton & Andy Anderson & John Oakes & Michael Fraser, 1994. "Environmental Equity: The Demographics of Dumping," Demography, Springer, vol. 31(2), pages 229-248, May.
  6. Evan J. Ringquist, 2005. "Assessing evidence of environmental inequities: A meta-analysis," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 24(2), pages 223-247.
  7. James T. Hamilton, 1995. "Testing for environmental racism: Prejudice, profits, political power?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 14(1), pages 107-132.
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