Modeling compliance to environmental regulation: Evidence from manufacturing industries

We examine the demand for pollution control equipment from 1973 to 1991 by those U.S. manufacturing industries that are highly sensitive to environmental regulation. We also consider the political determinants of the U.S. Environmental Protection Agency (EPA) enforcement budget. Because, as we demonstrate, the EPA enforcement budget is an important determinant of the industries' investment in pollution control equipment, we are able to establish a relationship between political factors and economic decision making on the part of the industries. Thus, our analysis demonstrates that the demand for pollution control equipment is sensitive to both economic and political factors.     

Avoiding the curves: Direct elicitation of time preferences

We propose and test a new method for eliciting curvature-controlled discount rates that are invariant to the form of the utility function. Our method uses a single elicitation task and obtains individual discount rates without knowledge of risk attitude or parametric assumptions about the form of the utility function. We compare our method to a double elicitation technique in which the utility function and discount rate are jointly estimated. Our experiment shows that these methods yield consistent estimates of the discount rate, which is reassuring given the wide range of estimates in the literature. We find little evidence of probability weighting, but in a second experiment, we observe that discount rates are sensitive to the length of the front-end delay, suggesting present bias. When the front-end delay is at least two weeks, we estimate average discount rates to be 11.3 and 12.2% in the two experiments.     

Models for estimating discount rates for long-term health risks using labor market data

This article utilizes evidence from job choices involving fatality risks to estimate individual discount rates for adverse health outcomes. The study compares the results from five distinct models for estimating discount rates from labor market data. The estimated discount rates range from 1% to 14% with confidence intervals that usually include financial market rates for the same period. This result, and consistent findings of significant compensating differentials for fatality risk, provide strong support for life-cycle models of individual rationality in the choice of job risks. Discounted value-of-life estimates are also developed and compared to the crosssection estimates that are more prevalent in the literature.     

Individual laboratory-measured discount rates predict field behavior

We estimate discount rates of 555 subjects using a laboratory task and find that these individual discount rates predict inter-individual variation in field behaviors (e.g., exercise, BMI, smoking). The correlation between the discount rate and each field behavior is small: none exceeds 0.28 and many are near 0. However, the discount rate has at least as much predictive power as any variable in our dataset (e.g., sex, age, education). The correlation between the discount rate and field behavior rises when field behaviors are aggregated: these correlations range from 0.09–0.38. We present a model that explains why specific intertemporal choice behaviors are only weakly correlated with discount rates, even though discount rates robustly predict aggregates of intertemporal decisions.     

Duty and discretion in a wayward agency: The U.S. environmental protection agency implementation of the hazardous waste laws

In the early 1980s the U.S. Environmental Protection Agency under Anne (Gorsuch) Burford became a battleground between President Reagan's appointees and the career civil servants. The new administration wanted to ease the regulatory burden, cooperate with industry, and reduce inflationary costs. The civil servants wanted to continue the existing policies of the Carter administration, or as they saw it, to implement the laws. The hazardous waste program, headed by Rita Lavelle, serves as a case study of the tension between the agency's duty (to the Resource Conservation and Recovery Act and the Comprehensive Environmental Response, Compensation and Liability Act) and the administrative discretion to carry out President Reagan's policy.     

EPA's 2006 Human-Subjects Rule for Pesticide Experiments

Arguing that the 2006 Environmental Protection Agency (EPA) human-subjects rule allows use of unethical third-party research (on pregnant women and children) in setting pesticide regulations, this article first (a) provides a brief history of U.S. pesticide regulation, particularly regarding childhood safety. Next it (b) outlines ethical and scientific loopholes in the 2006 EPA rule; (c) shows how the Human Subjects Review Board, mandated by the 2006 rule, has been implemented in flawed ways; and (d) illustrates that one source of problems with the rule may be influence by those with conflicts of interest.     

EPA's 2006 human-subjects rule for pesticide experiments

Arguing that the 2006 Environmental Protection Agency (EPA) human-subjects rule allows use of unethical third-party research (on pregnant women and children) in setting pesticide regulations, this article first (a) provides a brief history of U.S. pesticide regulation, particularly regarding childhood safety. Next it (b) outlines ethical and scientific loopholes in the 2006 EPA rule; (c) shows how the Human Subjects Review Board, mandated by the 2006 rule, has been implemented in flawed ways; and (d) illustrates that one source of problems with the rule may be influence by those with conflicts of interest.     

Communication of ambiguous risk information

This paper reports on the responses of 646 individuals to environmental risk information involving different forms of risk ambiguity. Recipients of more than one set of risk information do not simply average the risk levels provided. Rather, a variety of aspects of the nature of the risks that are communicated influence their probabilistic beliefs. Individuals' perceptions of the risk levels to which they are exposed are likely to be greater: (i) for more ambiguous risks, (ii) for risks for which the unfavorable risk evidence is presented last even when there is no temporal order, (iii) for risks for which the most unfavorable risk studies have been performed most recently, and (iv) for risks where there is asymmetry in the risk ambiguity that imposes substantial potential downside risks. Although these effects are modest for the median individual, the potential for extreme responses that reflect only the most adverse or the most favorable piece of information provided is quite prevalent. These findings are of interest more generally in that they indicate how individuals form their risk perceptions in the presence of risk ambiguity.The authors would like to thank the U.S. Environmental Protection Agency for support of this work under Cooperative Agreements Number CR-815445-01-2 and Number CR-814388-02-1. Dr. Alan Carlin and Dr. Ann Fisher provided valuable guidance in the design of the project, and Dr. Doyle Graham and Dr. Douglas Anthony offered generous assistance in communicating the medical consequences of nerve disease to subjects. Jon LaScala assisted superbly in the administration and analysis of the survey, and Patricia Born provided additional computer programming assistance.     

Immigration and environment in the U.S.: A spatial study of air quality

Environmental consequences are frequently cited as a justification for restricting immigration to the United States, but there is little empirical research on the environmental consequences of immigration to support such arguments. The research that does exist shows immigration to be less environmentally harmful than native population growth, but is hampered by small samples and fails to account for spatial autocorrelation of air quality. We use the air quality domain of the Environmental Protection Agency’s Environmental Quality Index (EQI) to examine the association between immigrant and native populations and local air quality across all counties in the continental U.S. We employ spatial models to account for spatial autocorrelation of air quality across the counties, controlling for indicators of economic development and location characteristics. We find that native population is strongly associated with worse air quality, while foreign-born population is associated with better air quality. However, this association varies by immigrant country of origin, with East Asian immigrants in particular associated with worse air quality, and by immigrants’ year of entry, with some immigration cohorts positively associated with air quality, and others negatively. These findings highlight the importance of population characteristics in understanding population-environment linkages.     

Using Geographic Information Systems to Create and Analyze Statistical Surfaces of Population and Risk for Environmental Justice Analysis

Objective. Methodological issues associated with the conventional statistical approach to environmental justice research, such as scale of analysis, continue to make assessments of environmental injustice problematic. Geographic information systems (GIS) can be used to facilitate multiscale analysis through the generation of statistical surface representations of both socioeconomic character and environmental risk. Methods. As a case study, U.S. Bureau of the Census and U.S. Environmental Protection Agency data sets were used to generate statistical surfaces of socioeconomic character and environmental risk for the southeast Pennsylvania region. Results. Analysis of these statistical surfaces reveals that socioeconomic status decreases with proximity to, and density of, hazardous facilities. Conclusions. Further research calls for incorporating other relevant information, such as amount and toxicity of toxic release, into GIS-based statistical surface representations of risk.     

Conceptualizing Age-Friendly Community Characteristics in a Sample of Urban Elders: An Exploratory Factor Analysis

Accurate conceptualization and measurement of age-friendly community characteristics would help to reduce barriers to documenting the effects on elders of interventions to create such communities. This article contributes to the measurement of age-friendly communities through an exploratory factor analysis of items reflecting an existing US Environmental Protection Agency policy framework. From a sample of urban elders (n?=?1,376), we identified 6 factors associated with demographic and health characteristics: access to business and leisure, social interaction, access to health care, neighborhood problems, social support, and community engagement. Future research should explore the effects of these factors across contexts and populations.     

The effect of information on health risk valuations

This article examines the effect of familiarity with chronic lung disease on people's willingness to pay to reduce their risk of contracting chronic bronchitis, and on their willingness to increase their risk of auto death to reduce chronic bronchitis risk. We find that persons who have a relative with chronic lung disease are willing to give up more income to reduce their risk of chronic bronchitis than persons with no first-hand knowledge of the disease; however, their willingness to increase their risk of auto death to reduce their risk of chronic bronchitis is no different, on average, than persons with no first-hand knowledge of lung disease. This suggests that responses to risk-risk tradeoffs may be more stable than responses to risk-income choices.This research was sponsored by Resources for the Future and by the U.S. Environmental Protection Agency, Office of Policy Planning and Evaluation, Alan Carlin and Joel Scheraga, project officers. We thank Robert Mitchell for his help in conducting focus groups, and Caroline Harnett and Sari Radin for research assistance. Stan Presser, Sue Dowden, and Tim Triplett of the University of Maryland's Survey Research Center administered the survey. We especially thank Stan Presser for his suggestion that we sample relatives of people with chronic lung disease. We also thank Kip Viscusi, Wes Magat, and Joel Huber for making available their computer programs and data, and Ajay Kalra for programming help. Paul Portney and John Mullahy provided useful comments on an earlier draff of the article, as did two referees.     

Presidential rhetoric,agency turnover,and the importance of salience to bureaucratic leadership

What explains the quit rates of federal agencies? Can presidential rhetoric affect quit rates of federal agencies, particularly those that implement salient policies? Although much research examines other ways presidents may affect the federal bureaucracy, absent is a systematic examination of presidential leadership of agency quit rates, despite the importance of personnel turnover to effective bureaucratic implementation. I argue that presidential rhetoric on the size of government can affect agency turnover. This impact is only likely for agencies that implement salient policies, because salience encourages bureaucratic responsiveness to elected officials. The findings reveal that presidents who speak more favorably about government reduce aggregate turnover in the Environmental Protection Agency and Department of Education from 1980 through 2005. I conclude with some observations about what these findings mean for presidential control of the bureaucracy.     

The Politics of Market-Based Environmental Regulation: Continuity and Change in Air Pollution Control Policy Conflict

Objectives. To expand scholarly attention to a neglected area of environmental policy and politics, I attempt to test several empirical propositions drawn from the small body of existing research on the politics of market-based environmental regulation. Methods. I analyze public comments on a recent U.S. Environmental Protection Agency regulatory action guiding states on the design of various market-based air pollution control programs. I focus on the types of commenting organizations and the nature, extent, and foundations of their support or opposition to market-based regulatory instruments. Results. I find more support for than opposition to the use of economic incentive programs in air pollution control. The support from business commenters is not surprising, but the level of support expressed by state regulators departs from previous research findings. Environmental groups are the principal dissenters. Overall, the findings suggest both change and continuity in the politics of air pollution control policymaking, with some possibility of a shift in the contours of the advocacy coalitions in the pollution control policy network. Conclusions. Market-based environmental regulation is still an evolving phenomenon in American public policy. Further research on the politics of its development is in order, and the opportunities to pursue such research are substantial.     

Estimating discount rates for environmental quality from utility-based choice experiments

We estimate rates of time preference using a utility-based choice experiment administered to a nationally representative sample of 2,914 respondents. For the full sample, the rate of time preference is very high for immediate benefits and drops off substantially thereafter, which is inconsistent with exponential discounting but consistent with hyperbolic discounting. Estimates of the hyperbolic discounting parameter range from 0.48 to 0.61. Visitors to water bodies have low rates of discount but exhibit hyperbolic discounting, whereas those who do not visit have consistently high rates of discount and low valuations of water quality.     

Stability of Estimates of the Compensation for Danger

Estimates of the extra earnings for jobs with higher risks of death are used in cost-benefit studies involving risk changes. Because of this use, the magnitude and stability of the estimated coefficient are important. Part of the current study closely reproduces the 1982 study by Marin and Psacharopoulos to check on the stability. We also examine the robustness of the estimate to the inclusion/exclusion of non-fatal risks and other relevant characteristics. While the magnitude of the coefficient has increased from the earlier study, the coefficient is robust to other changes in the specification. This yields a value of life figure of £9.7 million.     

Neighbors, nuisances and noxious releases: Community conflict and environmental hazards in the atomic city

Drawing from in-depth interviews with over 120 respondents, participant observation, and document analysis, we examine differential perceptions of environmental harms in Oak Ridge, Tennessee, home of a U.S. Government nuclear facility. The Oak Ridge Reservation has a 50-year history of nuclear weapons production and a poor environmental record. In the 1980s, a series of environmental revelations occurred and in 1989, the entire Oak Ridge Reservation was placed on the Environmental Protection Agency's Superfund list. This sparked heated debates within the community over environmental hazards and ultimately led to conflict and dissension. We analyze residents’ perceptions of environmental harms and highlight the salient variables contributing to community dissension, including conflicting levels of government trust, length of community residence, employment, race/ethnicity, and environmental health/illness.     

Willingness to pay for mortality risk reductions: Does latency matter?

Using results from two contingent valuation surveys conducted in Canada and the U.S., we explore the effect of a latency period on willingness to pay (WTP) for reduced mortality risk using a structural model. We find that delaying the time at which the risk reduction occurs by 10 to 30 years reduces WTP by more than 60% for respondents in both samples aged 40 to 60 years. The implicit discount rates are equal to 3.0–8.6% for Canada and 1.3–5.6% for the U.S. JEL Classification Q51 · Q58 The findings, interpretations and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the USEPA or of the World Bank, its Executive Directors or the countries they represent.     

Judgmental Discounting and Environmental Risk Perception: Dimensional Similarities, Domain Differences, and Implications for Sustainability

Environmental risks constitute a special category of risks because they often involve consequences that are highly uncertain, strongly delayed, occurring at distant places, and—therefore—mostly borne by others. Economic, decision–theoretic, and psychological research about the way people deal with such consequences is reviewed. Two major findings are presented: first, there is evidence that discounting mechanisms are stable across different preference dimensions (uncertainty, temporal, spatial, and social distance). Second, discount rates tend to vary across different problem domains (e.g., environmental vs. health vs. financial risks). In particular, it appears that temporal discounting is less pronounced for environmental risks than in other domains. Several factors are identified that affect the nature of the risk evaluation process, and it is argued that environmental risks differ from other risks on such factors. These environmental-risk characteristics may have important implications for policy strategies to promote environmental sustainability. Contrary to other domains, appealing to the public's long-term preferences may be successful. Also in policy making, insights from standard economic decision theory to environmental decision making should be applied with caution.