Informal environmental regulation of industrial air pollution: Does neighborhood inequality matter?

Publication: Working/Discussion PaperWU Working Paper

43 Downloads (Pure)

Abstract

This paper analyzes if neighborhood income inequality has an effect on informal regulation of environmental quality, using census tract-level data on industrial air pollution exposure from EPA´s Risk Screening Environmental Indicators and income and demographic variables from the American Community Survey and EPA´s Smart Location Database. Estimating a spatial lag model and controlling for formal regulation at the states level, we find evidence that overall neighborhood inequality - as measured by the ratio between the fourth and the second income quintile or the neighborhood Gini coefficient - increases local air pollution exposure, whereas a concentration of top incomes reduces local exposure. The positive coefficient of the general inequality measure is driven by urban neighborhoods, whereas the negative coefficient of top incomes is stronger in rural areas. We explain these findings by two contradicting effects of inequality: On the one hand, overall inequality reduces collective action and thus the organizing capacities for environmental improvements. On the other hand, a concentration of income at the top enhances the ability of rich residents to negotiate with regulators or polluting plants in their vicinity. (authors' abstract)
Original languageEnglish
Place of PublicationVienna
PublisherWU Vienna University of Economics and Business
DOIs
Publication statusPublished - 1 Nov 2014

Publication series

SeriesDepartment of Economics Working Paper Series
Number192

WU Working Paper Series

  • Department of Economics Working Paper Series

Cite this