Unmasking the Pollution Haven Effect / Arik Levinson, M. Scott Taylor.

Format:

Book

Author/Creator:

Levinson, Arik.

Contributor:

National Bureau of Economic Research.

Taylor, M. Scott.

Series:

Working Paper Series (National Bureau of Economic Research) no. w10629.

NBER working paper series no. w10629

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2004.

Summary:

This paper uses both theory and empirical work to examine the effect of environmental regulations on trade flows. We develop a simple economic model to demonstrate how unobserved heterogeneity, endogeneity and aggregation issues bias measurements of the relationship between regulatory costs and trade. We apply an estimating equation derived from the model to data on U.S. regulations and net trade flows among the U.S., Canada, and Mexico, for 130 manufacturing industries from 1977 to 1986. Our results indicate that industries whose abatement costs increased most experienced the largest increases in net imports. For the 20 industries hardest hit by regulation, the change in net imports we ascribe to the increase in regulatory costs amounts to more than half of the total increase in trade volume over the period.

Notes:

Print version record

July 2004.