Environmental regulations and manufacturers' location choices: Evidence from the Census of Manufactures

Abstract This paper uses establishment-level data from the Census of Manufactures and the Survey of Pollution Abatement Costs and Expenditures to examine the effect of differences in the stringency of state environmental regulations on establishment location choice. Unlike previous work in this area, which has focused on particular industries or sets of plants and on one or two measures of environmental regulatory stringency, this study explores the relationship between site choice and environmental regulations using a broad range of industries and measures of stringency. It uses a conditional logit model of plant location choice to show that interstate differences in environmental regulations do not systematically affect the location choices of most manufacturing plants.

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