Third Party Certification and Self-Regulation: Evidence from Responsible Care and Accidents in the US Chemical Industry

Huan Li (), Neha Khanna and Martina Vidovic

No 170492, 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota from Agricultural and Applied Economics Association

Abstract: In 2005, the Responsible Care (RC) program implemented a major structural change that mandated independent third party certification for all participants. The goal of this paper is to explore whether the introduction of mandatory third party certification has reduced accidents in RC facilities compared to non-RC facilities in the U.S. chemical industry. Using a sample of 21,741 observations from 1,460 facilities owned by 956 firms between 1995 and 2010, we estimate the average treatment effect by comparing RC facilities to statistically equivalent non-RC facilities before and after the introduction of third party certification. We find that, on average, the effect of third party certification on reducing the accidents is statistically insignificant. The results do not change when we account for self-selection into RC and endogenous treatment.

Keywords: Environmental Economics and Policy; Health Economics and Policy; Industrial Organization; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 45
Date: 2014
New Economics Papers: this item is included in nep-env
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea14:170492

DOI: 10.22004/ag.econ.170492

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