The Effects of Environmental Regulation on the Competitiveness of U.S. Manufacturing
Michael Greenstone (),
John List () and
No 18392, NBER Working Papers from National Bureau of Economic Research, Inc
The economic costs of environmental regulations have been widely debated since the U.S. began to restrict pollution emissions more than four decades ago. Using detailed production data from nearly 1.2 million plant observations drawn from the 1972-1993 Annual Survey of Manufactures, we estimate the effects of air quality regulations on manufacturing plants' total factor productivity (TFP) levels. We find that among surviving polluting plants, stricter air quality regulations are associated with a roughly 2.6 percent decline in TFP. The regulations governing ozone have particularly large negative effects on productivity, though effects are also evident among particulates and sulfur dioxide emitters. Carbon monoxide regulations, on the other hand, appear to increase measured TFP, especially among refineries. The application of corrections for the confounding of price increases and output declines and sample selection on survival produce a 4.8 percent estimated decline in TFP for polluting plants in regulated areas. This corresponds to an annual economic cost from the regulation of manufacturing plants of roughly $21 billion, about 8.8 percent of manufacturing sector profits in this period.
JEL-codes: D2 K3 L5 L6 Q5 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-eff, nep-ene, nep-env and nep-res
Note: EEE IO PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (63) Track citations by RSS feed
Downloads: (external link)
Working Paper: The Effects of Environmental Regulation on the Competitiveness of U.S. Manufacturing (2012)
Working Paper: The Effects of Environmental Regulation on the Competiveness of U.S. Manufacturing (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:18392
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().