Center for Environmental Policy and Administration

Does Regulation Stimulate Productivity? The Effect of Air Quality Policies on the Efficiency of U.S. Power Plants

Author:Rachel Fleishman, Rob Alexander, Stuart Bretschneider, David Popp
Date: June 2009

This research examines the effect of air quality regulations on the productivity of US power plants based on both economic and environmental outputs. Using data envelopment analysis (DEA) to estimate an efficiency measure incorporating both economic and environmental outcomes, we look at changes in efficiency in US power plants over an eleven-year time period (19942004) during which several different regulations were implemented for the control of nitrogen oxides (NOx) and sulfur dioxide (SO2).The paper then models how estimated efficiency behaves overtime as a function of regulatory changes. Findings suggest mixed effects of regulations on power plant efficiency when pollution abatement and electricity generation are both included as outputs.


David Popp
Center for Environmental Policy and Administration
The Maxwell School, Syracuse University
Revised 11/05/2010 06:35:53