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Do environmental right-to-know laws affect markets? Capitalization of information in the toxic release inventory

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  • Mastromonaco, Ralph

Abstract

This paper investigates how information contained in the U.S. Environmental Protection Agency's Toxic Release Inventory (TRI) program, one of the largest environmental right-to-know programs, affects prices in the housing market. I use a strengthening of the reporting requirements for the chemical lead in 2001 as exogenous variation to test for housing price changes near existing firms who must now report. Using a difference-in-differences specification, I find that listing an existing firm in the Toxic Release Inventory lowers housing prices up to 11% within approximately 1 mile. The results suggest that housing market participants do capitalize into prices at least some information conveyed by the TRI program.

Suggested Citation

  • Mastromonaco, Ralph, 2015. "Do environmental right-to-know laws affect markets? Capitalization of information in the toxic release inventory," Journal of Environmental Economics and Management, Elsevier, vol. 71(C), pages 54-70.
    • Handle: RePEc:eee:jeeman:v:71:y:2015:i:c:p:54-70
    DOI: 10.1016/j.jeem.2015.02.004
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    References listed on IDEAS

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    More about this item

    Keywords

    Right-to-know laws; Toxic release inventory; Quasi-experimental; Difference-in-differences; Environmental quality; Hedonics; Risk perceptions;
    All these keywords.

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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