Hog Industry Structure and the Stringency of Environmental Regulation

Azzeddine Azzam, Gibson Nene, Karina Schoengold

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

The paper develops a comparative statics model of long-run industry equilibrium in the presence of size-based environmental regulation stringency and applies the model to the U.S. hog industry. The economic model shows that when size-based environmental stringency is also size biased, large farms downsize, expand, or do neither depending on how environmental stringency shifts their marginal production cost relative to their average cost. Empirical testing using data from the top-ten hog-producing states suggests that environmental regulation stringency has limited impact on small farms and leads to a reduction in the number of large farms. Results cannot reject positive size bias at the farm level due to the stringency of environmental regulation.

Original languageEnglish (US)
Pages (from-to)333-358
Number of pages26
JournalCanadian Journal of Agricultural Economics
Volume63
Issue number3
DOIs
StatePublished - Sep 1 2015

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