Extensive environmental regulations have brought cleaner air
and health improvements to the United States, but they also have increased the
cost of manufacturing and reduced industrial productivity, according to a study
by economists at the University of Chicago and MIT.
Some economists have suggested that the regulations
encouraged companies to become more efficient, thus reducing costs at upgraded
plants. But in a paper published by the National Bureau of Economic Research,
three economists contend that the regulations led to a 4.8 percent decline in
productivity and reduced profits by nearly 9 percent from 1972-93.