An Industry-Adjusted Index of State Environmental Compliance Costs

40 Pages Posted: 9 Mar 2000 Last revised: 11 Dec 2022

See all articles by Arik Levinson

Arik Levinson

Georgetown University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: August 1999

Abstract

This paper describes a new, industry-adjusted index of state environmental compliance costs from 1977 to 1994. The index has two principal advantages: it controls for states' industrial compositions, and it can be calculated for 17 years, thus facilitating comparisons both among states and within states over time. Several notable facts emerge. First, differences in states' industrial compositions play a large role in determining their environmental compliance costs. Second, after controlling for industrial composition, the variance across states in compliance costs declined steadily between 1977 and 1994. Third, this cost index is negatively correlated with subjective indices of state environmental efforts compiled by various environmental organizations. In sum, the cost index described here provides some new data on historical trends in state regulatory differences, differs from the conventional wisdom regarding states' relative environmental efforts, and provides a useful tool for researchers exploring the effects of compliance costs on economic activity.

Suggested Citation

Levinson, Arik M., An Industry-Adjusted Index of State Environmental Compliance Costs (August 1999). NBER Working Paper No. w7297, Available at SSRN: https://ssrn.com/abstract=198750

Arik M. Levinson (Contact Author)

Georgetown University - Department of Economics ( email )

Washington, DC 20057
United States
202-687-5571 (Phone)
202-687-6102 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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