THE ENVIRONMENTAL PERFORMANCE OF POLLUTING PLANTS: A SPATIAL ANALYSIS*

Wayne B. Gray · Ronald J. Shadbegian

103 citations0/0 files storedJournal of Regional Science

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Regulation and Compliance Studies Energy, Environment, Economic Growth Spatial and Panel Data Analysis

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.

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References

1968Crime and Punishment: An Economic Approach 1988Spatial Econometrics: Methods and Models 2000Economic Analysis of Social Interactions 1991Properties of Tests for Spatial Dependence in Linear Regression Models 1988Enforcement leverage when penalties are restricted 1990Effectiveness of the EPA's Regulatory Enforcement: The Case of Industrial Effluent Standards 1995Testing for Environmental Racism: Prejudice, Profits, Political Power?2005Regulator reputation, enforcement, and environmental compliance

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