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Do Environmental Regulations Disproportionately Affect Small Businesses? Evidence from the Pollution Abatement Costs and Expenditures Survey

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  • Randy A. Becker
  • Carl Pasurka, Jr.
  • Ronald J. Shadbegian

Abstract

It remains an open question whether the impact of environmental regulations differs by the size of the business. Such differences might be expected because of statutory, enforcement, and/or compliance asymmetries. Here, we consider the net effect of these three asymmetries, by estimating the relationship between plant size and pollution abatement expenditures, using establishment-level data on U.S. manufacturers from the Census Bureau’s Pollution Abatement Costs and Expenditures (PACE) surveys of 1974-1982, 1984-1986, 1988-1994, 1999, and 2005, combined with data from the Annual Survey of Manufactures and Census of Manufactures. We model establishments’ PAOC intensity - that is, their pollution abatement operating costs per unit of economic activity - as a function of establishment size, industry, and year. Our results show that PAOC intensity increases with establishment size. We also find that larger firms spend more per unit of output than do smaller firms.

Suggested Citation

  • Randy A. Becker & Carl Pasurka, Jr. & Ronald J. Shadbegian, 2012. "Do Environmental Regulations Disproportionately Affect Small Businesses? Evidence from the Pollution Abatement Costs and Expenditures Survey," Working Papers 12-25, Center for Economic Studies, U.S. Census Bureau, revised Aug 2013.
    • Handle: RePEc:cen:wpaper:12-25
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    More about this item

    Keywords

    environmental regulation; costs; business size; U.S. manufacturing;
    All these keywords.

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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