Size-Based Regulation and Environmental Quality: Evidence from the U.S. Livestock Industry

With Gabriel E. Lade, John M. Crespi, and David A. Keiser

Abstract

The growing prevalence of animal feeding operations (AFOs) in the United States raises concerns among the public and regulators about their impact on local environmental quality. This paper studies the effects of Clean Water Act regulations that targeted water pollution from the largest hog AFOs. We compile a novel dataset linking historical regulatory records of AFOs in Iowa to downstream surface water pollution monitors. The regulation decreased ammonia concentrations downstream of large AFOs by 6 to 9 percentage points and modestly improved dissolved oxygen concentrations, but did not reduce phosphorus concentrations. Pollution reductions are largest during heavy precipitation months, consistent with the regulations reducing on-site spills and nutrient runoff from local fields. However, we find that pollution increased downstream from mid-sized AFOs, which were exempt from the regulations. Given the growth in the number of mid-sized facilities relative to large AFOs, we estimate that the regulation had little discernible impact on overall water quality.