Environmental regulations, capital formation, and the economic performance of US manufacturing industries

Thesis/Dissertation · Tue Jan 01 04:00:00 EST 1985

OSTI ID:5200370

Plesko, G A

This thesis presents estimates of the effects of environmental regulations on the production and investment decisions of manufacturing industries. The important feature of the model is the incorporation of purchase and production effects of environmental capital into the cost of capital. A neoclassical investment relationship is estimated for each two digit US manufacturing industry. The results are used to estimated investment patterns in the absence of regulation from 1958 to 1976. It is found that expenditures for abatement capital increased the average effective cost of nonabatement capital 8.4% in 1976. The results of the simulations suggest that absent environmental expenditures, 1976 real nonabatement capital stock in US manufacturing would have been 1.95% higher, with each dollar invested in pollution abatement capital diverting 245 dollars from nonabatement capital investment. It is concluded that the total real capital stock (abatement plus nonabatement) of US manufacturing was 5.88% higher in 1976 than it would have been in the absence of regulation.

• Research Organization: Wisconsin Univ., Madison (USA)
• OSTI ID: 5200370
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
290300* -- Energy Planning & Policy-- Environment
Health
& Safety
CAPITAL
COST
ECONOMIC IMPACT
INDUSTRY
INVESTMENT
POLLUTION ABATEMENT
POLLUTION REGULATIONS
PRODUCTION
REGULATIONS