Full Citation

Title: The Local Consequences of Federal Mandates: Evidence from the Clean Water Act

Citation Type: Miscellaneous

Publication Year: 2018

ISBN:

ISSN:

DOI:

NSFID:

PMCID:

PMID:

Abstract: This paper asks how local governments finance federal mandates and whether mandated spending brings value to local residents using a change in federal rules on municipal infrastructure following the 1972 Clean Water Act (CWA). To account for the endogeneity of municipal infrastructure adoption decisions, I leverage the role of river networks in distributing pollutants across cities to predict ex ante compliance with the CWA infrastructure mandate. Cities under the burden of compliance experienced substantial improvements to local ambient water quality as well as a twofold increase in resident fees. Public spending on non-mandated items did not change, indicating that mandates are unlikely to displace local funding of other goods and services. These simultaneous increases to water quality and local costs resulted in taste-based sorting. However, I find that resident value of mandate compliance depends upon the complementarity of water quality improvements to pre-existing local features, as well as exposure to upstream polluters. These results imply that mandates may reduce inefficiencies to local public goods provision that are valued no less than their cost to local residents.

Url: https://www.econ.iastate.edu/files/events/files/jerch_rhiannon_research_paper.pdf

User Submitted?: No

Authors: Jerch, Rhiannon L

Publisher: Cornell University

Data Collections: IPUMS NHGIS

Topics: Other

Countries: