Environmental Economics

The Economic Effects of Environmental Expenditures on the Construction Industry

The report presents estimates as to how projected expenditures by municipal governments and private governments on construction of new facilities to reduce air and water pollution will affect the total level of construction and how employment, wages, interest rates, and other variables will respond to the change in construction output. Effects on employment in selected sub-classes of the construction industry are also estimated. The response of the construction industry to increased spending for pollution control is estimated by use of an econometric model of the industry. The model, developed for the study, was simulated to predict the effects of projected spending through 1985. The results suggest that construction output will rise by less than the EPA mandated expenditure. The difference is due, in part, to displacement of spending that local governments would otherwise have done and, in part, to absorption of the increase by rising wages and prices in construction. There is also some displacement because of the increased cost of building a new plant. The results also suggest that employment in the construction industry is increased. Employment of young, black, inexperienced workers increases more than would be expected based on their representation in the construction labor force.

  • Keywords

    3. Cost and Economic Impacts Analysis
    6. Pollution Control Industry Surveys and Assessments
    3. Costs and Economic Impact Analysis - Other
    Environmental Media:
    f. Multimedia
    Jondrow, James
    Chase, David
    Gamble, Christopher
    Jacobson, Louis
    Levy, Robert
    Vavrichek, Bruce
    EPA Project Officer/ Manager:
    Geographic Area:
    Study Purpose:
    Empirical Application, Data Development
    Inventory Record #: EE-0319
  • Participating Organizations

    Research Organization:

    Public Research InstituteAddress: 2100 North Beauregard Street
    City: Alexandria State: VA22311 ZIP:
    Phone: Fax:
  • Report Details
    Number of Pages:
    Grant/Contract #:
  • How to Obtain Report

    Download report now, Order a copy of report, Not available from EERM

    Use link(s) to download or view the report

    Date Linked: 08/25/2017