THE ENVIRONMENTAL PERFORMANCE OF POLLUTING PLANTS: A SPATIAL ANALYSIS*

Wayne Gray and Ron Shadbegian

Journal of Regional Science, 2007, vol. 47, issue 1, 63-84

Abstract: ABSTRACT This paper uses plant‐level EPA and Census data to examine spatial factors affecting environmental performance, as measured by air pollutant emissions and regulatory compliance. We find significant effects for compliance, but not for emissions. Compliance is positively spatially correlated, partly explained by spatial correlations in observed plant characteristics, suggesting influences of industry agglomeration. The use of spatial econometric methods shows only small effects of spatially lagged compliance status, and does not greatly change the estimated contributions of other spatially explicit factors. Regulatory activity has the expected effect of increasing environmental performance, both at the inspected plant and at neighboring plants, but only for plants in the same state, demonstrating the importance of jurisdictional boundaries.

Date: 2007
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