RT Journal Article
SR Electronic
T1 The Clean Air Act Amendments and Firm Investment in Pollution Abatement Equipment
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 433
OP 447
DO 10.2307/3654730
VO 80
IS 3
A1 Lee, Amanda I.
A1 Alm, James
YR 2004
UL http://le.uwpress.org/content/80/3/433.abstract
AB The command-and-control approach to environmental regulation requires that firms install prescribed technologies to meet specified goals. However, environmental regulations change frequently; in addition, the enforcement agency cannot perfectly monitor firm compliance. We examine the impact of uncertainties surrounding the enactment and the enforcement of the Clean Air Act Amendments of 1990 on firm investment in air pollution abatement equipment. We find that our measures of the likelihood of CAAA passage clearly affect a firm’s investment in pollution equipment. Enforcement actions also affect a firm’s investment, but these effects are weaker and are statistically significant only after enactment. (JEL Q21)