Copyrights to papers in the Duke Economics Working Paper Archive remain with the authors or their assignees. Archive users may download papers and produce them for their own personal use, but downloading of papers for any other activity, including reposting to other electronic bulletin boards or archives, may not be done without the written consent of the authors.

Duke Economics Working Paper #98-09

Do Environmental Regulations Increase Construction Costs for Federal Aid Highways?: A Statistical Experiment


V. Kerry Smith, Roger Von Haefen,
and Wei Zhu

Abstract

This paper uses the Federal Aid Highway program as the source for natural experiment to evaluate whether complying with federal environmental regulations increases construction costs. This is accomplished by evaluating whether indexes of the environmental resources in each state affect construction expenditures for Federal Aid highways from 1990 to 1994. Statistical analyses suggest that the expenditures for Federal Aid highway construction and repair were impacted by measures of the environment resources or the regulatory activities likely to be associated with environmental mandates. Similar models applied to construction expenditures for state roads did not find the proxy measures for federal regulations as positive influences on cost.

Key Words: Environmental regulations, Compliance costs, Highways

JEL: Q28, R40, L51

Published in Journal of Transportation and Statistics, Vol. 2, No. 1, May 1999, pp. 45-60.