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The Case of the Missing Pollution Haven Hypothesis

  • Daniel Millimet


  • John List


One particularly vexing puzzle for economists and policymakers over the past several decades concerns the empirical significance of the theoretically predicted pollution haven hypothesis. While neoclassical theory and conventional wisdom both surmise that local economies will suffer deleterious effects from stricter environmental regulations, empirical studies have largely failed to validate such claims. This study utilizes the method of matching to show that the impact of stricter regulation is heterogeneous spatially, varying systematically based on location-specific attributes. Previous studies that assume a homogenous response may therefore inadvertently mask the overall impact of more stringent regulations by pooling unaffected and affected regions. Copyright Kluwer Academic Publishers 2004

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Article provided by Springer in its journal Journal of Regulatory Economics.

Volume (Year): 26 (2004)
Issue (Month): 3 (08)
Pages: 239-262

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Handle: RePEc:kap:regeco:v:26:y:2004:i:3:p:239-262
DOI: 10.1007/s11149-004-7550-7
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  1. Daniel L. Millimet & John A. List & Thanasis Stengos, 2003. "The Environmental Kuznets Curve: Real Progress or Misspecified Models?," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 1038-1047, November.
  2. Tim Jeppesen & John A. List & Henk Folmer, 2002. "Environmental Regulations and New Plant Location Decisions: Evidence from a Meta-Analysis," Journal of Regional Science, Wiley Blackwell, vol. 42(1), pages 19-49.
  3. Daniel Millimet & John List & Warren McHone, 2003. "Effects of air quality regulation on the destination choice of relocating plants," Natural Field Experiments 00502, The Field Experiments Website.
  4. Abay Mulatu & Raymond J.G.M. Florax & Cees A.A.M. Withagen, 2001. "Environmental Regulation and Competitiveness," Tinbergen Institute Discussion Papers 01-039/3, Tinbergen Institute.
  5. Daniel Millimet & John List & Per Fredriksson & Warren McHone, 2003. "Effects of Environmental Regulations on Manufacturing Plant Births: Evidence from a Propensity Score Matching Estimator," Natural Field Experiments 00501, The Field Experiments Website.
  6. Randy Becker & Vernon Henderson, 2000. "Effects of Air Quality Regulations on Polluting Industries," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 379-421, April.
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