Socioeconomic Disparities in Privatized Pollution Remediation: Evidence from Toxic Chemical Spills

Justin Marion and Jeremy West

Santa Cruz Department of Economics, Working Paper Series from Department of Economics, UC Santa Cruz

Abstract: Governments often privatize the administration of regulations to third-party specialists paid for by the regulated parties. We study how the resulting conflict of interest can have unintended consequences for the distributional impacts of regulation. In Massachusetts, the party responsible for hazardous waste contamination must hire a licensed contractor to quantify the environmental severity. We find that contractors’ evaluations favor their clients, exhibiting substantial score bunching just below thresholds that determine government oversight of the remediation. Client favoritism is more pronounced in socioeconomically disadvantaged neighborhoods and is associated with inferior remediation quality, highlighting a novel channel for inequities in pollution exposure. (JEL D63, J15, K32, L51, Q53, R23)

Keywords: Economics; Applied Economics; Health Disparities; Minority Health; Social Determinants of Health; Behavioral and Social Science; Applied economics (search for similar items in EconPapers)
Date: 2024-07-01
New Economics Papers: this item is included in nep-env and nep-hea
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Journal Article: Socioeconomic Disparities in Privatized Pollution Remediation: Evidence from Toxic Chemical Spills (2024)
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