alexa Hog Industry Structure and the Stringency of Environmental Regulation
Environmental Sciences

Environmental Sciences

Journal of Pollution Effects & Control

Author(s): Azzeddine Azzam, Gibson Nene, Karina Schoengold

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The paper develops a comparative statics model of long-run industry equilibrium in the presence of size-based environmental regulation stringency and applies the model to the U.S. hog industry. The economic model shows that when size-based environmental stringency is also size biased, large farms downsize, expand, or do neither depending on how environmental stringency shifts their marginal production cost relative to their average cost. Empirical testing using data from the top-ten hog-producing states suggests that environmental regulation stringency has limited impact on small farms and leads to a reduction in the number of large farms. Results cannot reject positive size bias at the farm level due to the stringency of environmental regulation.

This article was published in Canadian Journal of Agricultural Economics and referenced in Journal of Pollution Effects & Control

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