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Effects of Size-Based Environmental Regulations: Evidence of Regulatory Avoidance

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  • Stacy Sneeringer
  • Nigel Key

Abstract

United States environmental regulations often vary by operation size, with larger facilities facing more regulatory stringency. However, such legislative structure may have unintended consequences if operations downsize, slow their growth, or enter at a smaller scale in order to avoid regulation. In this study we use a regression-discontinuity framework and exploit the size threshold of federal and state rules targeting large-scale livestock operations to examine whether facilities adjust size to avoid regulation. We find statistical evidence of avoidance, primarily by operations entering at sizes just below the threshold. Copyright 2011, Oxford University Press.

Suggested Citation

  • Stacy Sneeringer & Nigel Key, 2011. "Effects of Size-Based Environmental Regulations: Evidence of Regulatory Avoidance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(4), pages 1189-1211.
    • Handle: RePEc:oup:ajagec:v:93:y:2011:i:4:p:1189-1211
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    File URL: http://hdl.handle.net/10.1093/ajae/aar040
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    Citations

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    Cited by:

    1. Azzeddine Azzam & Gibson Nene & Karina Schoengold, 2015. "Hog Industry Structure and the Stringency of Environmental Regulation," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 63(3), pages 333-358, September.
    2. Lim, Teng & Massey, Ray & McCann, Laura & Canter, Timothy & Omura, Seabrook & Willett, Cammy & Roach, Alice & Key, Nigel & Dodson, Laura, 2023. "Increasing the Value of Manure for Farmers," USDA Miscellaneous 333552, United States Department of Agriculture.
    3. Njuki, Eric & Bravo-Ureta, Boris, 2014. "A Bayesian Approach to Analyzing the Economic Costs of Environmental Regulation in U.S. Dairy Farming," Working Papers 33, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    4. Koichiro Ito & James M. Sallee, 2018. "The Economics of Attribute-Based Regulation: Theory and Evidence from Fuel Economy Standards," The Review of Economics and Statistics, MIT Press, vol. 100(2), pages 319-336, May.
    5. Stacy Sneeringer & Nigel Key & Shirley Pon, 2018. "Do Nutrient Management Plans Actually Manage Nutrients? Evidence from a Nationally‐Representative Survey of Hog Producers," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 40(4), pages 632-652, December.
    6. Wallander, Steven & Maguire, Kelly B., 2020. "The Costs of Environmental Regulation of the U.S. Agricultural Sector," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304400, Agricultural and Applied Economics Association.
    7. Eric Njuki & Boris E Bravo-Ureta & Víctor E Cabrera, 2020. "Climatic effects and total factor productivity: econometric evidence for Wisconsin dairy farms," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 47(3), pages 1276-1301.
    8. Sneeringer, Stacy & Pon, Shirley, 2016. "Do nutrient management plans actually manage nutrients? Evidence from a nationally-representative survey of hog producers," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235681, Agricultural and Applied Economics Association.
    9. Fertő, Imre & Csonka, Arnold, 2017. "Válság- és agglomerációs hatások a magyarországi sertéstartásban [Crisis and agglomeration in Hungary s pig production]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 105-122.
    10. Sasan Bakhtiari, 2013. "Firm Size Evolution and Outsourcing," Discussion Papers 2013-07, School of Economics, The University of New South Wales.
    11. Zach Raff & Andrew Meyer, 2022. "CAFOs and Surface Water Quality: Evidence from Wisconsin," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(1), pages 161-189, January.
    12. Csonka, Arnold & Fertő, Imre, 2017. "Does Crisis Have Impact on the Agglomeration in the Hungarian Pork Sector?," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261418, European Association of Agricultural Economists.
    13. Zhang, Wei, 2015. "Costs of a Practice-Based Air Quality Regulation: Dairy Farms in the San Joaquin Valley," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205304, Agricultural and Applied Economics Association.
    14. Abay Mulatu & Ada Wossink, 2014. "Environmental Regulation and Location of Industrialized Agricultural Production in Europe," Land Economics, University of Wisconsin Press, vol. 90(3), pages 509-537.
    15. MacDonald, James M. & Korb, Penni & Hoppe, Robert A., 2013. "Farm Size and the Organization of U.S. Crop Farming," Economic Research Report 262221, United States Department of Agriculture, Economic Research Service.
    16. Csonka, Arnold & Fertő, Imre, 2016. "Crisis and Agglomeration in the Hungarian Hog Sector," 149th Seminar, October 27-28, 2016, Rennes, France 244787, European Association of Agricultural Economists.

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