The Role of Demographic and Cost-Related Factors in Determining Where Plants Locate - A Tale of Two Texas Cities
In the environmental justice literature, evidence of disproportionate siting in poor or minority neighborhoods is decidedly mixed. Some allege this is due to the difference in whether the study looks at evidence at the national, state, or city level. Here, I compare results from two of the largest cities in Texas to results for the state overall to discern whether important demographic or other differences are evident at the city level that may be masked at a more aggregate level of analysis. I examine four possible hypotheses for why plants may locate in poor or minority neighborhoods: profit maximization (or cost minimization); relatively low willingness-to-pay for environmental amenities; a lower propensity for collective action by the community; and finally, the desire on the part of the firm to discriminate against particular groups of people. Specifically, I match the location of manufacturing plants that reported to the Toxic Release Inventory to US Census information at the census tract level at the time when the siting decision occurred. I then combine this information with a variety of other data, including voter participation, wages, and crime rates at the county-level. The main findings of this paper is that the principle driver of plant location decisions is profit maximization and that variables associated with the collective action and discrimination hypotheses are largely not significant, population density excepted. These findings appear to hold both at the city and state level. Variables associated with willingness-to-pay for environmental amenities appear somewhat sensitive to geographic scope: poverty is sometimes significant at the state level but never significant at the level of the city.
|Date of creation:||Jun 2009|
|Date of revision:||Jun 2009|
|Contact details of provider:|| Postal: 1200 Pennsylvania Ave., N.W., Washington, D.C. 20460|
Web page: https://www.epa.gov/environmental-economics
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Carlton, Dennis W, 1983. "The Location and Employment Choices of New Firms: An Econometric Model with Discrete and Continuous Endogenous Variables," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 440-449, August.
- Levinson, Arik, 1996. "Environmental regulations and manufacturers' location choices: Evidence from the Census of Manufactures," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 5-29, October.
- Brett Baden & Douglas Noonan & Rama Mohana Turaga, 2007. "Scales of justice: Is there a geographic bias in environmental equity analysis?," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 50(2), pages 163-185.
- Douglas Anderton & Andy Anderson & John Oakes & Michael Fraser, 1994. "Environmental Equity: The Demographics of Dumping," Demography, Springer;Population Association of America (PAA), vol. 31(2), pages 229-248, May.
- Robin R. Jenkins & Kelly B. Maguire & Cynthia L. Morgan, 2004.
"Host Community Compensation and Municipal Solid Waste Landfills,"
University of Wisconsin Press, vol. 80(4).
- Cynthia Morgan & Kelly B. Maguire & Robin R. Jenkins, 2002. "Host Community Compensation and Municipal Solid Waste Landfills," NCEE Working Paper Series 200204, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2002.
- Wolverton Ann, 2009.
"Effects of Socio-Economic and Input-Related Factors on Polluting Plants' Location Decisions,"
The B.E. Journal of Economic Analysis & Policy,
De Gruyter, vol. 9(1), pages 1-32, March.
- Ann Wolverton, 2008. "Effects of Socio-Economic and Input-Related Factors on Polluting Plants' Location Decisions," NCEE Working Paper Series 200808, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2008.
- James T. Hamilton, 1995. "Testing for environmental racism: Prejudice, profits, political power?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 14(1), pages 107-132.
- Miles Finney, 1994. "Property tax effects on intrametropolitan firm location: further evidence," Applied Economics Letters, Taylor & Francis Journals, vol. 1(2), pages 29-31.
- Baden, Brett M. & Coursey, Don L., 2002. "The locality of waste sites within the city of Chicago: a demographic, social, and economic analysis," Resource and Energy Economics, Elsevier, vol. 24(1-2), pages 53-93, February.
- Bartik, Timothy J, 1985. "Business Location Decisions in the United States: Estimates of the Effects of Unionization, Taxes, and Other Characteristics of States," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(1), pages 14-22, January.
- 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.
- Seema Arora & Timothy N. Cason, 1999. "Do Community Characteristics Influence Environmental Outcomes? Evidence from the Toxics Release Inventory," Southern Economic Journal, Southern Economic Association, vol. 65(4), pages 691-716, April.
When requesting a correction, please mention this item's handle: RePEc:nev:wpaper:wp200903. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Cynthia Morgan)
If references are entirely missing, you can add them using this form.