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Effects of Environmental Regulation on Economic Activity and Pollution in Commercial Agriculture

  • Sneeringer, Stacy E.

Research on environmental regulation’s effects on economic activity has largely focused on manufacturing, ignoring one of the major polluters in the U.S. – commercial agriculture. As livestock production has become increasingly mobile, regulation has become an important criterion in firm location. This article extends the literature on environmental regulation’s economic effects to commercial agriculture by exploiting a series of regulations adopted in North Carolina in the 1990s. During this time, the state’s hog production more than tripled as a consequence of welcoming state legislation. This sudden growth creates an opportunity to study how environmental regulation affects the location of economic activity, the externality costs of legislation aimed at economic growth, and the effects of swine on air pollution. The last of these foci is of particular importance to upcoming federal regulation of large-scale livestock production under the Clean Air Act. By exploiting the distinct trend breaks in hog production in North Carolina, I am able to non-parametrically control for trends in the rest of the country as well as trends in North Carolina prior to the enactment of the lax regulations. I find that the laws led to an additional 11% increase per year in hog production in North Carolina relative to the rest of the U.S., as well as a 10% increase per county per year in ambient air pollution. Through a series of falsification tests and examinations of alternative hypotheses, I conclude that the air pollution is attributable to the hogs; a doubling of production yields a 92% increase in ambient air pollution. The magnitude of the changes in air pollution is large enough to result in significant public health effects, totaling in cost to at least 20% of North Carolina’s hog production revenue.

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File URL: http://purl.umn.edu/46591
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Paper provided by Southern Agricultural Economics Association in its series 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia with number 46591.

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Date of creation: 2009
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Handle: RePEc:ags:saeana:46591
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  1. Eskeland, Gunnar S. & Harrison, Ann E., 2003. "Moving to greener pastures? Multinationals and the pollution haven hypothesis," Journal of Development Economics, Elsevier, vol. 70(1), pages 1-23, February.
  2. Arik Levinson, 2006. "Unmasking the Pollution Haven Effect," Working Papers 2008-02, Department of Economics, University of Calgary, revised 01 Jan 2008.
  3. Stacy Sneeringer, 2009. "Does Animal Feeding Operation Pollution Hurt Public Health? A National Longitudinal Study of Health Externalities Identified by Geographic Shifts in Livestock Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(1), pages 124-137.
  4. Kenneth Y. Chay & Michael Greenstone, 1999. "The Impact of Air Pollution on Infant Mortality: Evidence from Geographic Variation in Pollution Shocks Induced by a Recession," NBER Working Papers 7442, National Bureau of Economic Research, Inc.
  5. Mark Metcalfe, 2001. "U.S. Hog Production and the Influence of State Water Quality Regulation," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 49(1), pages 37-52, 03.
  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.
  7. Park, Dooho & Seidl, Andrew & Davies, Stephen, 2002. "Environmental Policy and Industry Location: The Case of the U.S. Livestock Industry," The Review of Regional Studies, Southern Regional Science Association, vol. 32(2), pages 293-307, Summer/Fa.
  8. Murat Isik, 2004. "Environmental Regulation and the Spatial Structure of the U.S. Dairy Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 949-962.
  9. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 249-275, February.
  10. Kenneth Y. Chay & Michael Greenstone, 1998. "Does Air Quality Matter? Evidence from the Housing Market," NBER Working Papers 6826, National Bureau of Economic Research, Inc.
  11. Lawrence, John D. & Kliebenstein, James, 1995. "Contracting and Vertical Coordination in the United States Pork Industry," Staff General Research Papers 5050, Iowa State University, Department of Economics.
  12. Hubbell, Bryan J. & Welsh, Rick, 1998. "An Examination Of Trends In Geographic Concentration In U.S. Hog Production, 1974-96," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 30(02), December.
  13. Michael Greenstone, 2003. "Did the Clean Air Act Cause the Remarkable Decline in Sulfur Dioxide Concentrations?," Working Papers 0407, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
  14. Martin, Laura L. & Zering, Kelly D., 1997. "Relationships Between Industrialized Agriculture And Environmental Consequences: The Case Of Vertical Coordination In Broilers And Hogs," Staff Papers 11551, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  15. Herath, Deepananda P.B. & Weersink, Alfons & Carpentier, Chantal Line, 2003. "Spatial Dynamics Of The Livestock Sector In The United States: Do Environmental Regulations Matter?," 2003 Annual meeting, July 27-30, Montreal, Canada 22059, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  16. Brian Roe & Elena G. Irwin & Jeff S. Sharp, 2002. "Pigs in Space: Modeling the Spatial Structure of Hog Production in Traditional and Nontraditional Production Regions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(2), pages 259-278.
  17. Alfons Weersink & Christin Eveland, 2006. "The Siting of Livestock Facilities and Environmental Regulations," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(1), pages 159-173, 03.
  18. List, John A. & McHone, W. Warren & Millimet, Daniel L., 2004. "Effects of environmental regulation on foreign and domestic plant births: is there a home field advantage?," Journal of Urban Economics, Elsevier, vol. 56(2), pages 303-326, September.
  19. Michael Greenstone, 1998. "The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 and 1977 Clean Air Act Amendments and the Census of Manufacturers," Working Papers 787, Princeton University, Department of Economics, Industrial Relations Section..
  20. Stacy Sneeringer, 2010. "A National, Longitudinal Study of the Effects of Concentrated Hog Production on Ambient Air Pollution," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(3), pages 821-835.
  21. Michael Greenstone & Ted Gayer, 2007. "Quasi-Experimental and Experimental Approaches to Environmental Economics," Working Papers 0713, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
  22. Martin, Laura L. & Zering, Kelly D., 1997. "Relationships Between Industrialized Agriculture And Environmental Consequences: The Case Of Vertical Coordination In Broilers And Hogs," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 29(01), July.
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