The Impact of EPA Regulations on the U.S. Manufacturing Industry

This research reassesses the impact of environmental regulations on economic performances in the U.S. manufacturing sector from 1973 to 2005. This paper uses information on NAICS-based 440 manufacturing industries from the NBER Manufacturing Productivity database and EPA’s PACE survey. Performing several econometric techniques and focusing on output and productivity, negative impacts of EPA regulations on both of them have been noticed. However, regulations cannot be blamed alone for output and productivity slow down. Dirty industries could avoid some output and productivity losses by spending more on pollution abatement. Evidence proves the presence of a “measurement effect” and a “real effect.