Description: Job Market Talk: Nieyan Cheng

Location: 368A Heady Hall

Title: “The Impact of China’s Place-based Environmental Regulations on its Hog Industry: A Synthetic Difference-in-differences Approach”

Abstract: Agricultural water pollution from the livestock industry is a growing concern in China and globally. As opposed to size-based regulations targeting larger facilities as in the United States, China’s regulations are place-based in nature. Since 2014, China implemented regulations in eight southeast provinces classified as a Development Control Zone (DCZ), targeting to improve downstream water quality by clearing or relocating hog farms. Leveraging a novel identification strategy, synthetic difference-in-differences, we provide one of the first systematic analyses of the impacts of the regulations on hog and sow inventories. By incorporating with generated county and year weights, synthetic difference-in-differences yields a more accurate estimate of regulations’ treatment effects. Our results show that, on average, the 2014 regulations led to a 9.33% and 10% reduction in hog and sow inventories, respectively, from 2014 to 2017 in the treated counties in DCZ provinces, mainly resulting from extensive margin changes due to the closures of hog farms. We also find the treatment effects vary substantially both within and across DCZ provinces: wealthier urban provinces such as Zhejiang experienced over 50% reduction in hog and sow inventories; and counties upstream of big cities or those designated as main hog counties saw steeper declines as well.

Contact: Otavio Bartalotti