A Direct Estimate of the Technique Effect: Changes in the Pollution Intensity of US Manufacturing 1990 - 2008

Arik Levinson

NBER Working Paper No. 20399
Issued in August 2014
NBER Program(s):Environment and Energy Economics

From 1990 to 2008, the real value of US manufacturing output grew by one-third while the pollution emitted from US factories fell by two-thirds. What accounts for this cleanup? Prior studies have documented that a relatively small share can be explained by changes in the composition of US manufacturing - a shift towards producing relatively more goods whose production processes involve less pollution. Those studies attribute the unexplained majority to "technique", a mix of input substitution, process changes, and end-of-pipe controls. But because that technique effect is a residual left over after other explanations, any errors or interactions in the original calculation could inflate the estimated technique. In this paper I provide the first direct estimate of the technique effect. I combine the National Emissions Inventories with the NBER-CES Manufacturing Industry Database for each of over 400 manufacturing industries. I aggregate across industries using analogs to the Laspeyres and Paasche price indexes for each of six major air pollutants. The calculations using this direct estimation of the technique effect support the research findings using indirect measures. From 1990 to 2008, production technique changes account for more than 90 percent of the overall cleanup of US manufacturing.

download in pdf format
   (179 K)

email paper

A non-technical summary of this paper is available in the February 2015 NBER Digest.  You can sign up to receive the NBER Digest by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w20399

Published: Arik Levinson, 2015. "A Direct Estimate of the Technique Effect: Changes in the Pollution Intensity of US Manufacturing, 1990–2008," Journal of the Association of Environmental and Resource Economists, vol 2(1), pages 43-56. citation courtesy of

Users who downloaded this paper also downloaded* these:
Shapiro and Walker w20879 Why is Pollution from U.S. Manufacturing Declining? The Roles of Environmental Regulation, Productivity, and Trade
Harrison, Hyman, Martin, and Nataraj w21763 When do Firms Go Green? Comparing Command and Control Regulations with Price Incentives in India
Levinson and O'Brien w20914 Environmental Engel Curves
Greenstone, List, and Syverson w18392 The Effects of Environmental Regulation on the Competitiveness of U.S. Manufacturing
Levinson w13616 Technology, International Trade, and Pollution from U.S. Manufacturing
NBER Videos

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

Contact Us