Estimating the hidden costs of environmental regulation

• 成果类型: Article
• 署名作者: Joshi, S; Krishnan, R; Lave, L
• 署名单位: Michigan State University; Carnegie Mellon University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr.2001.76.2.171
• 发表日期: 2001
• 页码: 171-198
• 关键词: productivity

摘要

This paper examines the extent to which accounting systems separately identify all the costs of environmental regulation. We estimate the relation between the visible costs of regulatory compliance (costs that firms' accounting systems correctly classify as environmental) and hidden environmental costs embedded in other accounts. We use plant-level data from 55 steel mills to estimate hidden costs, and we follow up with structured interviews of corporate-level managers and plant-level accountants. Empirical results show that a $1 increase in the visible cost of environmental regulation is associated with an increase in total cost (at the margin) of $10-$11, of which $9-$10 are hidden in other accounts. The findings suggest that inappropriate identification and accumulation of the costs of environmental compliance are likely to distort costs in firms subject to environmental regulation.