An Application of Input-Output Analysis to Pollution

Using data on pollution emissions from over 20,000 facilities in the United States, we find most pollution is released by a small number of firms, and that there is no correlation between the amount of pollution released and socioeconomic indicators such as income. We apply Leontief ’s method of input output analysis to determine pollution generated both by demand for final goods and inter-sector demand for intermediary goods. We find the sector that generated the most pollution in 2002, both in production of final goods and in use of intermediary goods, was primary nonferrous metal products. The analysis of several sectors, most notable motor vehicles, differs greatly when production of intermediary goods is considered