Environmental Regulation Stringency and U.S. Agriculture

To understand the likely impact of federal policies on nonpoint agricultural water pollution, we require a robust measure of state-level environmental regulation stringency. The objective of this paper is to derive and characterize state level environmental regulation stringency across states and over time. We compute a measure of environmental regulation stringency for the agricultural sector from 1960-2004 by calculating the shadow price of polluting inputs. We find evidence suggesting an increase in regulation stringency across all regions over the sample period, with the exception of the corn belt region, which has decreased in stringency. With few exceptions, regions of the U.S. with the highest proportion of farms see the lowest levels of regulation stringency. Acknowledgement