Location of Production and Endogenous Water Quality Regulation: A Look at the U.S. Hog Industry

The U.S. hog industry is experiencing and increase in both the average size and geographical concentration of feeding operations. These increases have caused attention to focus on the environmental consequences of hog production and on the regulations imposed to limit these consequences. This study examines the effect that differences in state water quality regulations have on the location of hog production in the U.S. Farm size is an important characteristic and therefore this analysis is conducted separately on small and large farms in order to examine the differences in effects by sized of operation. Results suggest greater water quality regulatory stringency has no effect on the location of hog production. The amount of production on small feeding operations seems responsive to tradition input and transportation costs, while production on larger operations is seemingly dependent on the existence of transportation and agricultural infrastructure.