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

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

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.

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File URL: ftp://ftp2.census.gov/ces/wp/2012/CES-WP-12-25R.pdf
File Function: First version, 2012
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Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 12-25r.

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Length: 42 pages
Date of creation: Sep 2012
Date of revision: Aug 2013
Handle: RePEc:cen:wpaper:12-25r
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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. Daniel L. Millimet, 2003. "Environmental Abatement Costs and Establishment Size," Contemporary Economic Policy, Western Economic Association International, vol. 21(3), pages 281-296, 07.
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  4. Wayne B. Gray & Ronald J. Shadbegian, 2001. "Plant Vintage, Technology, and Environmental Regulation," NBER Working Papers 8480, National Bureau of Economic Research, Inc.
  5. Randy Becker, 2001. "Air Pollution Abatement Costs Under the Clean Air Act: Evidence from the PACE Survey," Working Papers 01-12, Center for Economic Studies, U.S. Census Bureau.
  6. Gray, Wayne B & Shadbegian, Ronald J, 1998. "Environmental Regulation, Investment Timing, and Technology Choice," Journal of Industrial Economics, Wiley Blackwell, vol. 46(2), pages 235-56, June.
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  9. Haller, Stefanie & Murphy, Liam, 2010. "Corporate Expenditure on Environmental Protection," Papers WP347, Economic and Social Research Institute (ESRI).
  10. Randy Becker, 2009. "On Spatial Heterogeneity in Environmental Compliance Costs," Working Papers 09-25r, Center for Economic Studies, U.S. Census Bureau, revised Jan 2010.
  11. Pizer, William & Morgenstern, Richard & Shih, Jhih-Shyang, 1999. "Jobs Versus the Environment: An Industry-level Perspective," Discussion Papers dp-99-01-rev, Resources For the Future.
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  19. Collins, A. & Harris, R.I.D., 2001. "Does Plant Ownership Affect the level of Pollution Abatement Expenditure?," Papers 138, Portsmouth University - Department of Economics.
  20. 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.
  21. Randy A. Becker & Ronald J. Shadbegian, 2004. "A Change of PACE: Comparing the 1994 and 1999 Pollution Abatement Costs and Expenditures Surveys," NCEE Working Paper Series 200408, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Jul 2004.
  22. Eli Berman & Linda T. Bui, 1997. "band Labor Demand: Evidence from the South Coast Air Basin," NBER Working Papers 6299, National Bureau of Economic Research, Inc.
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  25. Alan Collins & Richard I. D. Harris, 2005. "The Impact Of Foreign Ownership And Efficiency On Pollution Abatement Expenditure By Chemical Plants: Some Uk Evidence," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(5), pages 747-768, November.
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