IDEAS home Printed from https://ideas.repec.org/p/emc/wpaper/dte597.html
   My bibliography  Save this paper

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

Author

Listed:
  • Lopamudra Chakraborti

    (Division of Economics, CIDE)

  • Michael Margolis

    (Division of Economics, CIDE)

  • José Jaime Sainz Santamaria

    (Division of Economics, CIDE)

Abstract

This paper provides the first, direct evidence that poorer communities in Mexico are associated with higher toxics pollution releases. We utilize previously unused, self-reported, plant-level annual database (from 2004 to 2012) and socioeconomic characteristics of the nearby population from the 2000 Census. Our measure of "Prosperity" is linked ot both a lower probability of toxic discharges into water as well as lower levels of averange releases. In addition, we find that at the bottom quintile of the "Prosperity" distribution, the predicted probability that a plant discharges in the fouth quartile of the pollution distribution is somewhat higher (28%) than for the first quartile of pollution. This negative association is consistent with two related findings that also indicate environmental justice concerns. A one prosperity point increase results in plants cleaning up i.e. reducing their toxic releases by as much as 10%. This order of magnitude is valid irrespective of the initial pollution levels reported by plants. Second, it is also linked with a 0.1% reduction in the probability of inaccurate reporting. Lastly, some evidence is found on changes in socioeconomic status indicator linked to decline in pollution.

Suggested Citation

  • Lopamudra Chakraborti & Michael Margolis & José Jaime Sainz Santamaria, 2016. "Do industries pollute more in poorer neighborhoods? Evidence from toxic releasing plants in Mexico," Working papers DTE 597, CIDE, División de Economía.
    • Handle: RePEc:emc:wpaper:dte597
    as

    Download full text from publisher

    File URL: http://www.economiamexicana.cide.edu/RePEc/emc/pdf/DTE/DTE597.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    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. Gangadharan, Lata, 2006. "Environmental compliance by firms in the manufacturing sector in Mexico," Ecological Economics, Elsevier, vol. 59(4), pages 477-486, October.
    3. Allen Blackman & Arne Kildegaard, 2010. "Clean technological change in developing-country industrial clusters: Mexican leather tanning," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 12(3), pages 115-132, September.
    4. 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.
    5. Blackman, Allen & Batz, Michael & Evans, David, 2003. "Maquiladoras, Air Pollution, and Human Health in Ciudad Juarez and El Paso," RFF Working Paper Series dp-03-18, Resources for the Future.
    6. José Féres & Arnaud Reynaud, 2012. "Assessing the Impact of Formal and Informal Regulations on Environmental and Economic Performance of Brazilian Manufacturing Firms," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 52(1), pages 65-85, May.
    7. Christopher S. Decker & Donald A. Nielsen & Roger P. Sindt, 2005. "Residential Property Values and Community Right‐to‐Know Laws: Has the Toxics Release Inventory Had an Impact?," Growth and Change, Wiley Blackwell, vol. 36(1), pages 113-133, February.
    8. 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.
    9. Cruz Guillermo, 2004. "El efecto del regulador y de la comunidad sobre el desempeno ambiental de la industria en Bogotá, Colombia," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, September.
    10. Janet Currie & Lucas Davis & Michael Greenstone & Reed Walker, 2015. "Environmental Health Risks and Housing Values: Evidence from 1,600 Toxic Plant Openings and Closings," American Economic Review, American Economic Association, vol. 105(2), pages 678-709, February.
    11. Helland, Eric & Whitford, Andrew B., 2003. "Pollution incidence and political jurisdiction: evidence from the TRI," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 403-424, November.
    12. 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.
    13. Francisco Lara-Valencia & Sioban Harlow & Maria Carmen Lemos & Catalina Denman, 2009. "Equity dimensions of hazardous waste generation in rapidly industrialising cities along the United States-Mexico border," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 52(2), pages 195-216.
    14. Dasgupta, Susmita & Lucas, Robert E.B. & Wheeler, David, 2002. "Plant size, industrial air pollution, and local incomes: evidence from Mexico and Brazil," Environment and Development Economics, Cambridge University Press, vol. 7(2), pages 365-381, May.
    15. Wolverton Ann, 2009. "Effects of Socio-Economic and Input-Related Factors on Polluting Plants' Location Decisions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-32, March.
    16. Escobar, Ninel & Chávez, Carlos, 2013. "Monitoring, firms’ compliance and imposition of fines: evidence from the Federal Industrial Inspection Program in Mexico City," Environment and Development Economics, Cambridge University Press, vol. 18(6), pages 723-748, December.
    17. Seroa da Motta, Ronaldo, 2006. "Analyzing the environmental performance of the Brazilian industrial sector," Ecological Economics, Elsevier, vol. 57(2), pages 269-281, May.
    18. Dasgupta, Susmita & Hettige, Hemamala & Wheeler, David, 2000. "What Improves Environmental Compliance? Evidence from Mexican Industry," Journal of Environmental Economics and Management, Elsevier, vol. 39(1), pages 39-66, January.
    19. Saha, Shrawantee & Mohr, Robert D., 2013. "Media attention and the Toxics Release Inventory," Ecological Economics, Elsevier, vol. 93(C), pages 284-291.
    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. Furszyfer Del Rio, Dylan D. & Sovacool, Benjamin K., 2023. "Of cooks, crooks and slum-dwellers: Exploring the lived experience of energy and mobility poverty in Mexico's informal settlements," World Development, Elsevier, vol. 161(C).
    2. Chakraborti, Lopamudra & Shimshack, Jay P., 2022. "Environmental disparities in urban Mexico: Evidence from toxic water pollution," Resource and Energy Economics, Elsevier, vol. 67(C).

    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 & Shimshack, Jay P., 2022. "Environmental disparities in urban Mexico: Evidence from toxic water pollution," Resource and Energy Economics, Elsevier, vol. 67(C).
    2. 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.
    3. Campa, Pamela & Muehlenbachs, Lucija, 2021. "Addressing Environmental Justice through In-Kind Court Settlements," CEPR Discussion Papers 16293, C.E.P.R. Discussion Papers.
    4. De Silva, Dakshina G. & McComb, Robert P. & Schiller, Anita R. & Slechten, Aurelie, 2021. "Firm behavior and pollution in small geographies," European Economic Review, Elsevier, vol. 136(C).
    5. Harrington, Donna Ramirez, 2012. "Two-stage adoption of different types of pollution prevention (P2) activities," Resource and Energy Economics, Elsevier, vol. 34(3), pages 349-373.
    6. Chakraborti, Lopamudra, 2020. "Regulator Reputation Effects in Developing Countries: Evidence from the Toxics Pollution Registry of Mexico," MPRA Paper 104580, University Library of Munich, Germany.
    7. Hausman, Catherine & Stolper, Samuel, 2021. "Inequality, information failures, and air pollution," Journal of Environmental Economics and Management, Elsevier, vol. 110(C).
    8. Macdonald, Kevin & Patrinos, Harry Anthony, 2021. "Education Quality, Green Technology, and the Economic Impact of Carbon Pricing," GLO Discussion Paper Series 955, Global Labor Organization (GLO).
    9. Baryshnikova, Nadezhda V., 2010. "Pollution abatement and environmental equity: A dynamic study," Journal of Urban Economics, Elsevier, vol. 68(2), pages 183-190, September.
    10. Banzhaf, H. Spencer, 2011. "The Political Economy of Environmental Justice," MPRA Paper 101191, University Library of Munich, Germany.
    11. Yao, Yao & Ivanovski, Kris & Inekwe, John & Smyth, Russell, 2020. "Human capital and CO2 emissions in the long run," Energy Economics, Elsevier, vol. 91(C).
    12. Parry, Ian W.H. & Sigman, Hilary & Walls, Margaret & Williams, Roberton C., III, 2005. "The Incidence of Pollution Control Policies," Discussion Papers 10651, Resources for the Future.
    13. Lan, Jing & Munro, Alistair, 2013. "Environmental compliance and human capital: Evidence from Chinese industrial firms," Resource and Energy Economics, Elsevier, vol. 35(4), pages 534-557.
    14. Luken, Ralph & Van Rompaey, Frank & Zigová, Katari­na, 2008. "The determinants of EST adoption by manufacturing plants in developing countries," Ecological Economics, Elsevier, vol. 66(1), pages 141-152, May.
    15. Germani, Anna Rita & Morone, Piergiuseppe & Testa, Giuseppina, 2014. "Environmental justice and air pollution: A case study on Italian provinces," Ecological Economics, Elsevier, vol. 106(C), pages 69-82.
    16. Blackman, Allen, 2009. "Alternative Pollution Control Policies in Developing Countries: Informal, Informational, and Voluntary," RFF Working Paper Series dp-09-10, Resources for the Future.
    17. Garrone, Paola & Groppi, Angelamaria, 2012. "Siting locally-unwanted facilities: What can be learnt from the location of Italian power plants," Energy Policy, Elsevier, vol. 45(C), pages 176-186.
    18. Athanasios Lapatinas & Anastasia Litina & Eftichios Sophocles Sartzetakis, 2019. "Environmental projects in the presence of corruption," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(1), pages 103-144, February.
    19. Claudia Poser & Edeltraud Guenther & Marc Orlitzky, 2012. "Shades of green: using computer-aided qualitative data analysis to explore different aspects of corporate environmental performance," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 22(4), pages 413-450, January.
    20. José Féres & Arnaud Reynaud, 2012. "Assessing the Impact of Formal and Informal Regulations on Environmental and Economic Performance of Brazilian Manufacturing Firms," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 52(1), pages 65-85, May.

    More about this item

    Keywords

    industrial pollution; local income and unemployment effects; informal regulation; environmental justice; community pressure; toxic releasis in Mexico;
    All these keywords.

    JEL classification:

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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:emc:wpaper:dte597. 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: Alfonso Miranda (email available below). General contact details of provider: https://edirc.repec.org/data/cideemx.html .

    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.