Effects of Air Quality Regulations on Polluting Industries

Posted: 27 Mar 2000

See all articles by Randy A. Becker

Randy A. Becker

U.S. Census Bureau - Center for Economic Studies

J. Vernon Henderson

London School of Economics & Political Science (LSE); National Bureau of Economic Research (NBER)

Abstract

This paper examines unintended effects of air quality regulation, using plant data for 1963-92. A key regulatory tool since 1978 is the annual designation of county air quality attainment status. Nonattainment status triggers specific equipment requirements, with the severity and enforcement of regulations rising with plant size. The differential in regulation favors attainment areas, reducing births for polluting industries in nonattainment areas by 26-45 percent. Industries and sectors with bigger plants are affected the most, shifting industrial structure toward less regulated single-plant firms. Large preregulation plants do benefit from grandfathering provisions, but both grandfathering and shifts to small-scale new plants contribute to environmental degradation.

JEL Classification: L59, Q28

Suggested Citation

Becker, Randy A. and Henderson, J. Vernon, Effects of Air Quality Regulations on Polluting Industries. Available at SSRN: https://ssrn.com/abstract=212921

Randy A. Becker

U.S. Census Bureau - Center for Economic Studies ( email )

4600 Silver Hill Road
Washington, DC 20233
United States

J. Vernon Henderson (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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