Do Environmental Regulations Disproportionately Affect Small Businesses? Evidence from the Pollution Abatement Costs and Expenditures Survey

42 Pages Posted: 22 Jan 2013 Last revised: 22 Mar 2016

See all articles by Randy A. Becker

Randy A. Becker

U.S. Census Bureau - Center for Economic Studies

Carl A. Pasurka

Environmental Protection Agency (EPA)

Ronald J. Shadbegian

University of Massachusetts at Dartmouth; U.S. Environmental Protection Agency (EPA)

Date Written: August 1, 2013

Abstract

It remains an open question whether the impact of environmental regulations differs by the size of the business. Such differences might be expected because of statutory, enforcement, and/or compliance asymmetries. Here, we consider the net effect of these three asymmetries, by estimating the relationship between plant size and pollution abatement expenditures, using establishment-level data on U.S. manufacturers from the Census Bureau’s Pollution Abatement Costs and Expenditures (PACE) surveys of 1974-1982, 1984-1986, 1988-1994, 1999, and 2005, combined with data from the Annual Survey of Manufactures and Census of Manufactures. We model establishments’ PAOC intensity – that is, their pollution abatement operating costs per unit of economic activity – as a function of establishment size, industry, and year. Our results show that PAOC intensity increases with establishment size. We also find that larger firms spend more per unit of output than do smaller firms.

Keywords: environmental regulation, costs, business size, U.S. manufacturing

JEL Classification: Q52, L51, L6

Suggested Citation

Becker, Randy A. and Pasurka, Carl A. and Shadbegian, Ronald J., Do Environmental Regulations Disproportionately Affect Small Businesses? Evidence from the Pollution Abatement Costs and Expenditures Survey (August 1, 2013). US Census Bureau Center for Economic Studies Paper No. CES-WP-12-25R, Available at SSRN: https://ssrn.com/abstract=2205196 or http://dx.doi.org/10.2139/ssrn.2205196

Randy A. Becker (Contact Author)

U.S. Census Bureau - Center for Economic Studies ( email )

4600 Silver Hill Road
Washington, DC 20233
United States

Carl A. Pasurka

Environmental Protection Agency (EPA) ( email )

William Jefferson Clinton Building West
1200 Pennsylvania Ave., N.W.
Washington, DC 20460
United States
202-566-2275 (Phone)

Ronald J. Shadbegian

University of Massachusetts at Dartmouth ( email )

North Dartmouth, MA 02747
United States

U.S. Environmental Protection Agency (EPA) ( email )

Ariel Rios Building
1200 Pennsylvania Ave., N.W.
Washington, DC 20460
United States

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