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On Spatial Heterogeneity in Environmental Compliance Costs

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  • Randy A. Becker

Abstract

This paper examines the extent of variation in regulatory stringency below the state level, using establishment-level data from the U.S. Census Bureau’s Pollution Abatement Costs and Expenditures survey to estimate a county-level index of environmental compliance costs. County-level variation is found to explain 11 to 18 times more of the variation in environmental compliance costs than state-level variation alone, and the range of environmental compliance costs within a state is often large. At least 34% of U.S. counties have environmental compliance costs that are statistically different from their states’. Results suggest that important spatial variation is lost in state-level studies of environmental regulation.

Suggested Citation

  • Randy A. Becker, 2011. "On Spatial Heterogeneity in Environmental Compliance Costs," Land Economics, University of Wisconsin Press, vol. 87(1), pages 28-44.
  • Handle: RePEc:uwp:landec:v:87:y:2011:i:1:p:28-44
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    References listed on IDEAS

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    1. Randy A. Becker & J. Vernon Henderson, 2001. "Costs of Air Quality Regulation," NBER Chapters,in: Behavioral and Distributional Effects of Environmental Policy, pages 159-186 National Bureau of Economic Research, Inc.
    2. Arik Levinson, 2001. "An Industry-Adjusted Index of State Environmental Compliance Costs," NBER Chapters,in: Behavioral and Distributional Effects of Environmental Policy, pages 131-158 National Bureau of Economic Research, Inc.
    3. 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.
    4. Berman, Eli & Bui, Linda T. M., 2001. "Environmental regulation and labor demand: evidence from the South Coast Air Basin," Journal of Public Economics, Elsevier, pages 265-295.
    5. John A. List & Daniel L. Millimet & Per G. Fredriksson & W. Warren McHone, 2003. "Effects of Environmental Regulations on Manufacturing Plant Births: Evidence from a Propensity Score Matching Estimator," The Review of Economics and Statistics, MIT Press, pages 944-952.
    6. Wayne B. Gray, 1997. "Manufacturing Plant Location: Does State Pollution Regulation Matter?," NBER Working Papers 5880, National Bureau of Economic Research, Inc.
    7. Virginia D. McConnell & Robert M. Schwab, 1990. "The Impact of Environmental Regulation on Industry Location Decisions: The Motor Vehicle Industry," Land Economics, University of Wisconsin Press, vol. 66(1), pages 67-81.
    8. Eli Berman & Linda T. M. Bui, 2001. "Environmental Regulation And Productivity: Evidence From Oil Refineries," The Review of Economics and Statistics, MIT Press, pages 498-510.
    9. List, John A. & Co, Catherine Y., 2000. "The Effects of Environmental Regulations on Foreign Direct Investment," Journal of Environmental Economics and Management, Elsevier, vol. 40(1), pages 1-20, July.
    10. John A. List & Mitch Kunce, 2000. "Environmental Protection and Economic Growth: What Do the Residuals Tell Us?," Land Economics, University of Wisconsin Press, vol. 76(2), pages 267-282.
    11. Kahn, Matthew E., 1997. "Particulate pollution trends in the United States," Regional Science and Urban Economics, Elsevier, vol. 27(1), pages 87-107, February.
    12. Wolfgang Keller & Arik Levinson, 2002. "Pollution Abatement Costs and Foreign Direct Investment Inflows to U.S. States," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 691-703, November.
    13. Becker, Randy A., 2005. "Air pollution abatement costs under the Clean Air Act: evidence from the PACE survey," Journal of Environmental Economics and Management, Elsevier, pages 144-169.
    14. Henderson, J Vernon, 1996. "Effects of Air Quality Regulation," American Economic Review, American Economic Association, pages 789-813.
    15. 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.
    16. Carlo Carraro & Gilbert E. Metcalf, 2001. "Behavioral and Distributional Effects of Environmental Policy," NBER Books, National Bureau of Economic Research, Inc, number carr01-1.
    17. Levinson, Arik, 1996. "Environmental regulations and manufacturers' location choices: Evidence from the Census of Manufactures," Journal of Public Economics, Elsevier, pages 5-29.
    18. Carlo Carraro & Gilbert E. Metcalf, 2001. "Introduction to "Behavioral and Distributional Effects of Environmental Policy"," NBER Chapters,in: Behavioral and Distributional Effects of Environmental Policy, pages 1-12 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Becker, Randy A. & Pasurka, Carl & Shadbegian, Ronald J., 2013. "Do environmental regulations disproportionately affect small businesses? Evidence from the Pollution Abatement Costs and Expenditures survey," Journal of Environmental Economics and Management, Elsevier, vol. 66(3), pages 523-538.
    2. Millimet, Daniel L. & Roy, Jayjit, 2011. "Three New Empirical Tests of the Pollution Haven Hypothesis When Environmental Regulation is Endogenous," IZA Discussion Papers 5911, Institute for the Study of Labor (IZA).
    3. repec:cen:wpaper:12-25 is not listed on IDEAS
    4. Becker, Randy A., 2011. "Local environmental regulation and plant-level productivity," Ecological Economics, Elsevier, vol. 70(12), pages 2516-2522.
    5. repec:eee:jeeman:v:83:y:2017:i:c:p:164-184 is not listed on IDEAS

    More about this item

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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