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Pollution Abatement and Environmental Equity: A Dynamic Study

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  • Nadezhda V. Baryshnikova

    (School of Economics, University of Adelaide)

Abstract

We study pollution abatement and environmental equity in a dynamic panel model using data for 236 plants in the US pulp and paper industry observed over the period 1985-1997. We suggest a theoretical model for the plant manager who incorporates regulatory pressures into his calculations of optimal amount of pollution. Assuming actual pollution abatement exhibits a sluggish adjustment process, the theoretical model leads to an empirical AR(1) panel model. We estimate our model using GMM with both ''temporally lagged'' and ''spatially lagged'' instruments. We find that children, people below the poverty line and the smallest minority races are exposed to higher levels of pollution. Our findings show no evidence of environmental inequity against African-Americans or Hispanics, and find that the neighborhoods with a higher percentage of elderly population face signicantly lower levels of pollution from the plants.

Suggested Citation

  • Nadezhda V. Baryshnikova, 2010. "Pollution Abatement and Environmental Equity: A Dynamic Study," School of Economics and Public Policy Working Papers 2010-06, University of Adelaide, School of Economics and Public Policy.
    • Handle: RePEc:adl:wpaper:2010-06
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    References listed on IDEAS

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    1. Gray, Wayne B. & Shadbegian, R.J.Ronald J., 2004. "'Optimal' pollution abatement--whose benefits matter, and how much?," Journal of Environmental Economics and Management, Elsevier, vol. 47(3), pages 510-534, May.
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    6. James T. Hamilton, 1995. "Testing for environmental racism: Prejudice, profits, political power?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 14(1), pages 107-132.
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    Keywords

    pollution abatement; environmental equity; dynamic panel; instrumental variable; fixed effects;
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