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dc.contributor.authorDeschênes, Olivier
dc.contributor.authorGreenstone, Michael
dc.contributor.authorShapiro, Joseph S.
dc.date.accessioned2012-09-11T22:35:43Z
dc.date.available2012-09-11T22:35:43Z
dc.date.issued2012-07-15
dc.identifier.urihttp://hdl.handle.net/1721.1/72655
dc.description.abstractThe 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, which is about 8.8 percent of manufacturing sector profits in this period.en_US
dc.publisherCambridge, MA: Department of Economics, Massachusetts Institute of Technologyen_US
dc.relation.ispartofseriesWorking paper, Massachusetts Institute of Technology, Dept. of Economics;12-18
dc.rightsAn error occurred on the license name.en
dc.rights.uriAn error occurred getting the license - uri.en
dc.subjectwillingness to pay for air qualityen_US
dc.subjectcap and tradeen_US
dc.subjectozoneen_US
dc.subjectpharmaceuticalsen_US
dc.subjectmortalityen_US
dc.subjectcompensatory behavioren_US
dc.subjecthuman healthen_US
dc.titleDefensive Investments and the Demand for Air Quality: Evidence from the NOx Budget Program and Ozone Reductionsen_US
dc.typeWorking Paperen_US


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