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Water Quality and Environmental Treatment Facilities

Water Quality and Environmental Treatment Facilities. Kim, Chang and Kelleher Presented at APPAM International Conference June 12, 2009. Overview of the paper. Question : Has increased investment in basic treatment facilities improved the water quality in waterways in Korea?

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Water Quality and Environmental Treatment Facilities

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  1. Water Quality and Environmental Treatment Facilities Kim, Chang and Kelleher Presented at APPAM International Conference June 12, 2009

  2. Overview of the paper • Question : Has increased investment in basic treatment facilities improved the water quality in waterways in Korea? • Conclusion : Yes, building treatment facilities has contributed to improving the water quality even with consideration of the negative effect through reduced enforcement effort. • An important policy implication : Building treatment facilities alone does not guarantee water quality, but depends in addition on proper regulation and enforcement

  3. Theory • The investment in basic treatment facilities has both a direct, positive effect on water quality and an indirect, negative effect on water quality. • The reason for a negative effect is that the investment could affect a budget-constrained regulatory agency’s choice in a way that would perversely encourage the regulated firms’ emissions. • Stackelberg Model of a regulatory agency and n homogeneous regulated firms.

  4. E NC* 0 p

  5. E NC*-g NC* 0 p

  6. E NC*-g NC* 0 p

  7. Estimation Equations

  8. Data • Data regarding the four main rivers in Korea • Yearly data covering 1991 through 2006 • Not river-specific, but aggregate data

  9. Summary Statistics

  10. Table 1 (2SLS)

  11. Table 2 (2SLS)

  12. Table 3 (OLS)

  13. Previous Studies and Our Contribusiton • Garvie and Keeler (1994), Neilson and Kim (2001) • Kwak and Kim (1995), Kang (2003) • Kim and Chang (2007)

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