Effects of Water Quality Monitoring on Plant-Level Pollution: Evidence from the Clean Water Act

This paper utilizes a 70% drop in ambient water quality monitoring to show that point sources increase their pollutant discharges in the posttreatment period. Our sample examines 264 major municipal plants in Pennsylvania, South Carolina, and Virginia from 1990 to 2010. Results show that plants in the treatment group increase the relative quantity and concentration discharges of biological oxygen demand between 18% and 39% in contrast to the control group. Estimated coefficients are large in magnitude given prior evidence on the inflexibility of water pollution abatement levels relative to discharge limits. (JEL Q52, Q53)