This paper describes a new, industry-adjusted index of state environmental compliance costs from 1977 to 1994. The index has two principal advantages: it controls for states' industrial compositions, and it can be calculated for 17 years, thus facilitating comparisons both among states and within states over time. Several notable facts emerge. First, differences in states' industrial compositions play a large role in determining their environmental compliance costs. Second, after controlling for industrial composition, the variance across states in compliance costs declined steadily between 1977 and 1994. Third, this cost index is negatively correlated with subjective indices of state environmental efforts compiled by various environmental organizations. In sum, the cost index described here provides some new data on historical trends in state regulatory differences, differs from the conventional wisdom regarding states' relative environmental efforts, and provides a useful tool for researchers exploring the effects of compliance costs on economic activity.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
7297.
Length: Date of creation: Aug 1999 Date of revision: Handle: RePEc:nbr:nberwo:7297
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Randy A. Becker & J. Vernon Henderson, 2001.
"Costs of Air Quality Regulation,"
NBER Chapters,
in: Behavioral and Distributional Effects of Environmental Policy, pages 159-186
National Bureau of Economic Research, Inc.
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