Impact of Government-Sponsored Pollution Prevention Practices on Environmental Compliance and Enforcement: Evidence from a Sample of US Manufacturing Facilities

A two-way fixed effects Poisson model is used to investigate the impact of 43 EPA-sponsored pollution prevention (P2) practices on compliance and enforcement for a sample of facilities in the US manufacturing sector. I find that P2 adoption reduces environmental violations in three industries while increasing violations in two others. P2 adoption also spurs fewer enforcement actions in three industries. I further partition the P2 practices into three categories based on their approach to improve environmental performance. In doing so, I find that practices that involve changes in operating procedures--about a third of adopted P2 practices--such as instituting a self-inspection and monitoring program to discover spills or leak sources, improving maintenance scheduling and/or labeling procedures, are effective in reducing violations while practices that involve equipment or material changes are not. I also find that adopters of practices that require changes in either procedures or manufacturing equipment--about half of adopted practices--are rewarded with a more cooperative treatment of environmental infractions with fewer enforcement actions.Pollution Prevention Act, P2 practices, compliance, enforcement, Poisson models, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q53, L51, C23,

Semiparametric Estimation of Consumer Demand Systems with Micro Data

This article proposes a semiparametric two-step procedure for estimating a censored consumer demand system with micro data. The semiparametric estimator considered in the first step is suggested by Klein and Spady (1993). This estimator, used as a counterpart of the probit estimator in a conventional two-step model, does not make any distributional assumptions about the disturbances and so is exempt from model misspecification and plausible heteroscedasticity. In the second step, we motivate the choice of the Almost Ideal Demand System (AIDS) as an economic representation of consumers' demand behavior. Implementing our proposed semiparametric two-step procedure as well as Shonkwiler and Yen (1999)'s two-step model to a household meat consumption dataset from China generates the price and expenditure elasticities of demand. We also conducted the Horrowitz and H01rdle (1994)'s specification test to our data and reject the null.censoring, semiparametric estimator, consumer demand system, food expenditures, Demand and Price Analysis,

Country of Origin Advertising and U.S. Wine Imports

The objective of this paper is to investigate the impact of media advertising on the US consumption of imported wine. A panel data of seven countries and twelve years from 1994-2005 is used to estimate the demand function for US wine imports. Our empirical analysis reveals evidence of strong price and advertising effects of domestic and imported wines on imported quantities; the advertising of imported wines significantly increases the quantity of imports while the advertising of domestic wines has a strong depressing effect on imported wine volumes. Our short-run import demand price and advertising elasticity estimates are -0.406 and 0.109 for imports and 0.654 and -0.370 for domestic wines, respectively. Other determinants such as population, real income and country specific fixed effects are also found significant. Based on our model estimates, we compute the marginal return to advertising to be $2.68 on average for the six importing countries and$3.40 for the U.S.International Relations/Trade, Marketing,

Impact of Adoption of Improved Groundnut Varieties on Factor Demand and Productivity in Uganda

The study analyzed the impact of adoption of improved groundnut varieties on farm inputs demand and productivity using instrumental variables approach. The data was collected from a simple random sample of 161 groundnut farmers in Eastern Uganda. Econometric results show significant increase in expenditure on improved seed and labor among adopters relative to the non-adopters. Adoption of improved varieties significantly increased groundnuts yield, by about 1688kg per hectare. Thus, more effort is needed to increase farmers’ access to improved varieties. The Government and partners should facilitate the development of local seed multiplication systems to reduce the cost of improved seed..Production Economics, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies,

Do Voluntary Pollution Reduction Programs (VPRs) Spur Innovation in Environmental Technology

In the context of the EPA's 33/50 program, we study whether a VPR can prompt firms to develop new environmental technologies that yield future emission reduction benefits. Because pollutant reductions generally require costly reformulations of products and/or production processes, environmental over-compliance induced by a VPR may potentially spur environmental innovation that can reduce these costs. Conversely, a VPR may induce a participating firm to divert resources from environmental research to environmental monitoring and compliance activities that yield short-term benefits in reduced emissions. We find evidence that higher rates of 33/50 program participation are associated with significant reductions in the number of successful environmental patent applications four to six years after the program ended; these results suggest a negative relationship between the 33/50 program and longer-run environmental innovation.Research and Development/Tech Change/Emerging Technologies,

Impact of Conditional Cash Transfers and Remittances on Credit Market Outcomes in Rural Nicaragua

The impact of public and private transfers on credit markets has not been sufficiently studied and understanding any spill over effects caused by these transfers may be useful for policy makers. This paper estimates the impact of Conditional Cash Transfers (CCTs) and remittances received by poor households in rural Nicaragua on their decision to request a loan. We find that, on average, CCTs did not affect the request of credit while remittances increased it, controlling for potential endogeneity. We argue the reduction in income risk provided by remittances changes borrowers’ expected marginal returns to a loan and/or their creditworthiness, as perceived by lenders. The successful enforcement of the use of CCTs on long-term investments seems to have avoided externalities on the use of short-term credit these households have access to and their creditworthiness.International Development, D14, F22, O15,

Climate change and household welfare in Sub-Saharan Africa: empirical evidence from Swaziland

The fifth assessment report of the Intergovernmental Panel on Climate Change and several studies suggest that climate change is expected to increase food insecurity and poverty in many parts of the world. In this paper, we adopt a microeconometric approach to empirically estimate the impact of climate change-induced hikes in cereal prices on household welfare in Swaziland (also Kingdom of Eswatini). We do so first by econometrically estimating expenditure and price elasticities of five food groups consumed by households in Swaziland using the Almost Ideal Demand System (AIDS), based on data from the 2009/2010 Swaziland Household Income and Expenditure Survey. Second, we use the estimated expenditure and compensated elasticities from the AIDS model, food shares from the household survey, and food price projections developed by the International Food Policy Research Institute (IFPRI) to estimate the proportionate increase in income required to maintain the level of household utility that would have prevailed absent an increase in food prices. Our results show increases in cereal prices due to climate change are expected to double extreme poverty in urban areas and increase poverty in rural areas of the country to staggering levels - between 71 and 75%, compared to 63% before the price changes. Income transfers of between 17.5 and 25.4% of pre-change expenditures are needed to avoid the welfare losses

Do Farmers Adopt Fewer Conservation Practices on Rented Land? Evidence from Straw Retention in China

We examine how land tenure arrangements affect Chinese crop farmers’ adoption of straw retention, a key conservation practice promoted by the Chinese government in part to curb rising air pollution. Using data from a 2016 farmer household survey covering 1,659 crop plots in Henan Province in central China, we analyze whether farmers are less likely to adopt straw retention on rented plots compared to own-contracted plots. To address the potential endogeneity of the choice of renting from others, we use an instrument exploiting the role of remittance income from household members migrated to cities in a bivariate probit model and a control function approach, respectively. Our main results reveal that the Chinese crop farmers’ likelihood of adopting straw retention were almost cut in half on rented plots compared to their owned plots, assuming the assumptions for biprobit or control functions hold. This suggests greater attention is needed to examine the spillovers across agricultural and environmental policies as China pushes for both a nationwide land rental market and more sustainable agricultural practices

Land Tenure and Adoption of Straw Retention: Evidence from Henan, China

We examine how land tenure arrangements affect Chinese crop farmers’ adoption of straw retention, a key conservation practice promoted by the Chinese government in part to curb rising air pollution. Using data from a 2016 farmer household survey covering 1,659 crop plots in Henan Province in central China, we analyze how straw retention choices are influenced by two different land tenure arrangements: own-contracted plots versus rented plots. Empirical results from several probit regressions reveal that, after controlling for crop choice, harvest season, spatial climate, and other plot-level and household-level covariates, a rented plot is associated with a 10.7 percent reduction in the probability of adopting straw retention after harvest throughout 2015. A Heckman selection model that corrects the sample selection bias further supports the negative correlation between less secure rented farmland and straw retention adoption. This suggests that more caution and attention is warranted to the long-term sustainability of farmland in urbanizing China as the Chinese government keeps pushing for further development of rural land rental market