Paper Number: 2012-06

Document Date: 08/2013

Author(s): Randy A. Becker, Carl Pasurka Jr., and Ronald J. Shadbegian

Subject Area(s): Economic Impacts

JEL Classification: Environmental Economics: Pollution Control Adoption and Costs; Distributional Effects; Employment Effects; Regulation and Industrial Policy: Economics of Regulation; Industry Studies: Manufacturing

Keywords: environmental regulation; costs; business size; U.S. manufacturing

Abstract: This paper examines whether the impact of environmental regulations differs by the size of the business. We consider the net effect of statutory, enforcement, and compliance asymmetries by estimating the relationship between plant size and pollution abatement expenditures, using establishment-level data on U.S. manufacturers from the Census Bureau’s Pollution Abatement Costs and Expenditures (PACE) survey and from its Annual Survey of Manufactures and Census of Manufactures. We model establishments’ pollution abatement operating costs (PAOC) per unit of economic activity as a function of establishment size, industry, state, and year. Our results show that PAOC intensity increases with establishment and firm size.

Published: Becker, Randy A., Carl Pasurka, and Ronald J. Shadbegian. 2013. "Do Environmental Regulations Disproportionately Affect Small Businesses? Evidence from the Pollution Abatement Costs and Expenditures Survey," Journal of Environmental Economics and Management 66(3): 523–538.

This paper is part of the Environmental Economics Working Paper Series.

• Do Environmental Regulations Disproportionately Affect Small Businesses? Evidence from the Pollution Abatement Costs and Expenditure Survey (PDF)(44 pp, 834 K, 08/2013)