The Impact of Pollution Abatement Investment on Productivity Change: AnEmpirical Comparison of the U.S., Germany, and Canada / Klaus Conrad, Catherine J. Morrison.

Format:

Book

Author/Creator:

Conrad, Klaus.

Contributor:

National Bureau of Economic Research.

Morrison, Catherine J.

Series:

Working Paper Series (National Bureau of Economic Research) no. w1763.

NBER working paper series no. w1763

Language:

English

Subjects (All):

Industrial productivity.

Pollution--Economic aspects.

Pollution.

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

The Impact of Pollution Abatement Investment on Productivity Change

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1985.

Cambridge, Mass. : National Bureau of Economic Research, 1985.

Summary:

It has often been asserted that imposition of environmental regulations in the 1970's may be a partial explanation for the productivity growth slowdowns experienced by most industrialized countries during that decade.The contention is that expenses incurred to satisfy these regulations, such as investment in pollution abatement capital, is unproductive in terms of measured output. Thus conventional productivity measures will be biased downward when such regulations are imposed. In this paper we construct a model which explicitly recognizes the difference between pollution abatement capital and "productive" capital and then use this framework to devleop an adjustment to nonparametric measures of productivity growth, purging them of the bias resulting from regulation. We measure the bias for the manufacturing sectors of three countries, the U.S., Canada and Germany, and thereby assess the impact of increased pollution abatement capital regulation on productivity growth. Our principal finding is that the bias, which depends on relative rates of growth of output and pollution abatement capital investment, is modest.

Notes:

Print version record

October 1985.