NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Environmental Regulation and Productivity: Evidence from Oil Refineries

Eli Berman, Linda T.M. Bui

NBER Working Paper No. 6776
Issued in November 1998
NBER Program(s):   PR

We examine the effect of air quality regulation on the productivity of some of the most heavily regulated manufacturing plants in the United States, the oil refineries of the Los Angeles (South Coast) Air Basin. We use direct measures of local air pollution regulation in this region to estimate their effects on abatement investment. Refineries not subject to these local environmental regulations are used as a comparison group. We study the period of increased regulation between 1979 and 1992. On average each regulation cost $3M per plant on compliance dates and a further $5M per plant on dates of increased stringency. We also construct measures of total factor productivity using plant level data which allow us to observe physical quantities of inputs and outputs for the entire population of refineries. Despite the high costs associated with the local regulations, productivity in the Los Angeles Air Basin refineries rose sharply during the 1987 - 1992 period, a period of decreased refinery productivity in other regions. We conclude that measures of the cost of environmental regulation may be significantly overstated. The gross costs may be far greater than the net cost, as abatement may be productive.

download in pdf format
   (1294 K)

email paper

This paper is available as PDF (1294 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w6776

Published: Berman, Eli and Linda T. M. Bui. "Environmental Regulation And Productivity: Evidence From Oil Refineries," Review of Economics and Statistics, 2001, v83(3,Aug), 498-510. citation courtesy of

Users who downloaded this paper also downloaded these:
Jaffe and Palmer w5545 Environmental Regulation and Innovation: A Panel Data Study
Gray and Shadbegian w4321 Environmental Regulation and Manufacturing Productivity at the Plant Level
Greenstone w8484 The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 & 1977 Clean Air Act Amendments and the Census of Manufactures
Gray and Shadbegian w4994 Pollution Abatement Costs, Regulation, and Plant-Level Productivity
Kahn and Mansur w16538 How Do Energy Prices, and Labor and Environmental Regulations Affect Local Manufacturing Employment Dynamics? A Regression Discontinuity Approach
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us