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Effects of Size-Based Environmental Regulations: Evidence of Regulatory Avoidance

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  • Stacy Sneeringer
  • Nigel Key

Abstract

United States environmental regulations often vary by operation size, with larger facilities facing more regulatory stringency. However, such legislative structure may have unintended consequences if operations downsize, slow their growth, or enter at a smaller scale in order to avoid regulation. In this study we use a regression-discontinuity framework and exploit the size threshold of federal and state rules targeting large-scale livestock operations to examine whether facilities adjust size to avoid regulation. We find statistical evidence of avoidance, primarily by operations entering at sizes just below the threshold. Copyright 2011, Oxford University Press.

Suggested Citation

  • Stacy Sneeringer & Nigel Key, 2011. "Effects of Size-Based Environmental Regulations: Evidence of Regulatory Avoidance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(4), pages 1189-1211.
  • Handle: RePEc:oup:ajagec:v:93:y:2011:i:4:p:1189-1211
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    File URL: http://hdl.handle.net/10.1093/ajae/aar040
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    Cited by:

    1. Koichiro Ito & James M. Sallee, 2014. "The Economics of Attribute-Based Regulation: Theory and Evidence from Fuel-Economy Standards," NBER Working Papers 20500, National Bureau of Economic Research, Inc.
    2. Sneeringer, Stacy & Pon, Shirley, 2016. "Do nutrient management plans actually manage nutrients? Evidence from a nationally-representative survey of hog producers," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235681, Agricultural and Applied Economics Association.
    3. Fertő, Imre & Csonka, Arnold, 2017. "Válság- és agglomerációs hatások a magyarországi sertéstartásban
      [Crisis and agglomeration in Hungary s pig production]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 105-122.
    4. Sasan Bakhtiari, 2013. "Firm Size Evolution and Outsourcing," Discussion Papers 2013-07, School of Economics, The University of New South Wales.
    5. Zhang, Wei, 2015. "Costs of a Practice-Based Air Quality Regulation: Dairy Farms in the San Joaquin Valley," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205304, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    6. Abay Mulatu & Ada Wossink, 2014. "Environmental Regulation and Location of Industrialized Agricultural Production in Europe," Land Economics, University of Wisconsin Press, vol. 90(3), pages 509-537.
    7. Njuki, Eric & Bravo-Ureta, Boris, 2014. "A Bayesian Approach to Analyzing the Economic Costs of Environmental Regulation in U.S. Dairy Farming," Working Papers 33, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.

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