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Socioeconomic Disparities in Privatized Pollution Remediation: Evidence from Toxic Chemical Spills

Author

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  • Marion, Justin
  • West, Jeremy

Abstract

Governments often privatize the administration of regulations to third-party specialists paid for by the regulated parties. We study how the resulting conflict of interest can have unintended consequences for the distributional impacts of regulation. In Massachusetts, the party responsible for hazardous waste contamination must hire a licensed contractor to quantify the environmental severity. We find that contractors’ evaluations favor their clients, exhibiting substantial score bunching just below thresholds that determine government oversight of the remediation. Client favoritism is more pronounced in socioeconomically disadvantaged neighborhoods and is associated with inferior remediation quality, highlighting a novel channel for inequities in pollution exposure. (JEL D63, J15, K32, L51, Q53, R23)

Suggested Citation

  • Marion, Justin & West, Jeremy, 2024. "Socioeconomic Disparities in Privatized Pollution Remediation: Evidence from Toxic Chemical Spills," Santa Cruz Department of Economics, Working Paper Series qt3d68r0jt, Department of Economics, UC Santa Cruz.
    • Handle: RePEc:cdl:ucscec:qt3d68r0jt
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    More about this item

    Keywords

    Economics; Applied Economics; Health Disparities; Minority Health; Social Determinants of Health; Behavioral and Social Science; Applied economics;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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