Seminar | Wendong Zhang, Iowa State University

2021-05-11

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

Speaker： Wendong Zhang，Iowa State University

Time: 10:00 - 11:30 (GMT+8),  17 May, 2021  

On Zoom

Zoom ID: 9316789264

Password：790971

About the speaker:

Dr. Wendong Zhang is an assistant professor in the Department of Economics at Iowa State University since August 2015. His research seeks to better understand U.S. farmland market, agricultural water conservation, and Chinese agriculture. Dr. Zhang is also affiliated with Center for Agricultural and Rural Development (CARD), where he co-founded the new ISU China Ag center jointly with Dr. Dermot Hayes in collaboration with Chinese Academy of Agricultural Sciences in 2017. His research has been published in journals such as American Journal of Agricultural Economics, Journal of Economic Geography, Land Economics, and World Development. He is also currently serving as an Associate Editor for American Journal of Agricultural Economics. Dr. Zhang received his Ph.D. in Agricultural, Environmental and Development Economics from the Ohio State University in July 2015, and he also hold a BSc in Environmental Science from Fudan University.

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 regulation is place-based in nature. In 2014, China classified eight urban provinces in the southeast as a Development Control Zone, which prohibits new hog facilities construction and encourages hog farms to relocate to other regions. Leveraging a novel identification strategy, synthetic difference-in-differences, and the place-based nature of China's environmental regulations, we provide the first systematic analysis of the impacts of the regulations on county-level hog and sow inventory. By relying on synthetic controls constructed with both county and year weights, synthetic difference-in-differences yields a more accurate and doubly robust estimate of regulations' treatment effects. Our results show that, on average, the 2014 regulations led to a 6.4% and 7.4% reduction in hog and sow inventories from 2014 to 2017 in the treated counties in Development Control Zone provinces, mainly resulting from extensive margin changes due to the closures of existing hog farms. We also find the treatment effects vary substantially both within and across Development Control Zone provinces. Counties positioned in the major hog production counties or the upstream of big cities saw steeper declines in hog inventory as well.