THE SHORT-RUN IMPACT OF ENVIRONMENTAL-PROTECTION COSTS ON UNITED-STATES PRODUCT PRICES

Using an input-output framework, this paper investigates the magnitude of the impact that environmental protection costs had on prices in the United States in 1977. With the imposition of environmental protection costs, the projected total price increases for individual industries range from 0. 12% to 6. 58%. Due to data limitations, the constraints of input-output analysis, and the structural changes that occurred in the economy from 1972 to 1977, the results should not be taken as definitive. However, the results do indicate the typical sort of variation in impact likely to occur across industries and that the average impact on prices was modest.