Pollution Abatement Costs, Regulation, and Plant-Level Productivity

Wayne Gray and Ron Shadbegian

No 4994, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We analyze the connection between productivity, pollution abatement expenditures, and other measures of environmental regulation for plants in three industries (paper, oil, and steel). We examine data from 1979 to 1990, considering both total factor productivity levels and growth rates. Plants with higher abatement cost levels have significantly lower productivity levels. The magnitude of the impact is somewhat larger than expected: $1 greater abatement costs appears to be associated with the equivalent of $1.74 in lower productivity for paper mills, $1.35 for oil refineries, and $3.28 for steel mills. However, these results apply only to variation across plants in productivity levels. Estimates looking at productivity variation within plants over time, or estimates using productivity growth rates show a smaller (and insignificant) relationship between abatement costs and productivity. Other measures of environmental regulation faced by the plants (compliance status, enforcement activity, and emissions) are not significantly related to productivity.

JEL-codes: D24 Q28 (search for similar items in EconPapers)
Date: 1995-01
Note: PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (67)

Published as Gray, Wayne B. (ed.) Economic costs and consequences of environmental regulation, International Library of Environmental Economics and Policy. Aldershot, U.K. and Burlington, VT: Ashgate, Dartmouth, 2002.

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Working Paper: Pollution Abatement Costs, Regulation And Plant-Level Productivity (1994)
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