The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Pollution Haven Hypothesis

  • Arik Levinson
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2693

Abstract

The pollution haven hypothesis, or pollution haven effect, is the idea that polluting industries will relocate to jurisdictions with less stringent environmental regulations. Empirical studies of the phenomenon have been hampered by the difficulty of measuring regulatory stringency and by the fact that stringency and pollution are determined simultaneously. Early studies based on cross sections of data found no significant effect of regulations on industry locations. Newer studies that use panels of data to control for unobserved heterogeneity or instrumental variables to account for simultaneity have found statistically significant, reasonably sized effects.

Keywords

Environmental regulations Fixed-effects models Free trade Heckscher–Ohlin trade theory Inter-jurisdictional competition Not in my backyard (NIMBY) Pollution abatement costs and expenditures Pollution haven hypothesis Porter hypothesis Protectionism Race to the bottom Regulatory stringency Tariffs Unobserved heterogeneity 

JEL Classifications

F1 F2 H73 Q5 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Arik Levinson
    • 1
  1. 1.