REGIONAL IMPACTS OF AIR-QUALITY REGULATION - APPLYING AN ECONOMIC-MODEL

The South Coast Air Quality Management District promulgated an Air Quality Management Plan (AQMP) in 1989 so as to attain federal air quality standards for the South Coast Air Basin by the year 2007. Because the AQMP affects all walks of life, its economic impact has become the focal point of debates. This paper examines not only the traditional approach to evaluating the direct cost of a public policy change on the regulated community, but also a systematic approach to assessing direct and indirect impacts of such policy change. This latter approach will enhance the decision-making process by allowing one to compare the impacts of various projects in the same context.