Abstract
The pollution haven hypothesis, or pollution haven effect, is the idea that polluting industries will relocate to jurisdictions with less stringent environmental regulations. Empirical studies of the phenomenon have been hampered by the difficulty of measuring regulatory stringency and by the fact that stringency and pollution are determined simultaneously. Early studies based on cross sections of data found no significant effect of regulations on industry locations. Newer studies that use panels of data to control for unobserved heterogeneity or instrumental variables to account for simultaneity have found statistically significant, reasonably sized effects.
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Levinson, A. (2018). Pollution Haven Hypothesis. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2693
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DOI: https://doi.org/10.1057/978-1-349-95189-5_2693
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Online ISBN: 978-1-349-95189-5
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