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Journal of Regulatory Economics

, Volume 26, Issue 3, pp 239–262 | Cite as

The Case of the Missing Pollution Haven Hypothesis

  • Daniel L. Millimet
  • John A. List
Article

Abstract

One particularly vexing puzzle for economists and policymakers over the past several decades concerns the empirical significance of the theoretically predicted pollution haven hypothesis. While neoclassical theory and conventional wisdom both surmise that local economies will suffer deleterious effects from stricter environmental regulations, empirical studies have largely failed to validate such claims. This study utilizes the method of matching to show that the impact of stricter regulation is heterogeneous spatially, varying systematically based on location-specific attributes. Previous studies that assume a homogenous response may therefore inadvertently mask the overall impact of more stringent regulations by pooling unaffected and affected regions.

Keywords

pollution haven hypothesis environmental regulation treatment effects propensity score matching 

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Copyright information

© Kluwer Academic Publishers 2004

Authors and Affiliations

  1. 1.Department of EconomicsSouthern Methodist UniversityDallas
  2. 2.University of Maryland and NBERCollege ParkUSA

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