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Effects of air quality regulation on the destination choice of relocating plants

Author

Listed:
  • John A. List
  • W. Warren McHone
  • Daniel L. Millimet

Abstract

Whether lax environmental regulations are an important attraction for mobile capital remains one of the most controversial issues in the area of regulatory federalism. While the extant literature does a nice job of estimating the effects of environmental regulation on the spatial allocation of new plant births, one neglected area of research is the effect that environmental regulation has on plant relocation decisions. This paper uses an annual (1980--90) county level panel data set to examine the relationship between air quality regulatory stringency and the destination choice of relocating plants. We estimate empirical models using both parametric and semi-nonparametric specifications. Empirical results from both models suggest that air quality regulations alter significantly the destination choices of relocating plants. Copyright 2003, Oxford University Press.

Suggested Citation

  • John A. List & W. Warren McHone & Daniel L. Millimet, 2003. "Effects of air quality regulation on the destination choice of relocating plants," Oxford Economic Papers, Oxford University Press, vol. 55(4), pages 657-678, October.
    • Handle: RePEc:oup:oxecpp:v:55:y:2003:i:4:p:657-678
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    References listed on IDEAS

    as
    1. John A. List & W. Warren McHone, 2000. "Measuring the effects of air quality regulations on "dirty" firm births: Evidence from the neo- and mature-regulatory periods," Papers in Regional Science, Springer;Regional Science Association International, vol. 79(2), pages 177-190.
    2. Windmeijer, F A G & Silva, J M C Santos, 1997. "Endogeneity in Count Data Models: An Application to Demand for Health Care," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(3), pages 281-294, May-June.
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    5. 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, February.
    6. John A. List, 2001. "Do Explicit Warnings Eliminate the Hypothetical Bias in Elicitation Procedures? Evidence from Field Auctions for Sportscards," American Economic Review, American Economic Association, vol. 91(5), pages 1498-1507, December.
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