Use the paper "Media Attention and the Toxic Release Inventory" by Shrawantee Saha and Robert Mohr to answer a few softball questions.

A.What's the logic behind requiring firms to report their toxic releases?

B.What role does the news media and the internet play in this process?

C.What was the relationship between news coverage of a firm's toxic releases and the amount that they released in subsequent years?

D.According to the paper, how did neighbourhood factors such as a racial composition and income status impact the likelihood of reporting on toxic releases in a particular neighbourhood?

E.What does your answer to part D say about environmental justice within the context of the TRI's reporting requirements as an environmental policy?

*****REFER TO THE LINK FOR THE ARTICLE*****

Article history:

Received 14 November 2011

Received in revised form 11 May 2013 Accepted 14 May 2013

Available online 6 July 2013

JEL Classification:Q51

Q52

Q53

Q58

Keywords:

Environmental justice Media attention

Toxics Release Inventory

1. abstract

This paper explores the relationship between the print media and toxic releases in thefirst wave of Toxics Release Inventory (TRI)filings. Itfirst studies the degree to which neighborhood characteristics like racial composition and income status associate with the number of newspaper articles written about a TRI establish- ment, controlling for the volume of toxic releases, industry and observable establishment characteristics. It follows up to study whether establishments that receive media attention reduce toxics releases more than those that do not. Neither a qualitative review of the articles nor regression results show any significant correlation between race or income and the likelihood of being included in media reports. A difference-in-difference approach shows a statistically significant decrease in the toxic releases of establishments that received media attention compared to those that did not.

substances.

1. Introduction

Since 1987, all U.S. manufacturing facilities with at least 10 em-

ployees and producing more than 500 lb of each of the 320 listed

chemicals, must annually report an inventory of toxic releases to the

EPA. Information about these releases is then publically disseminated

through the Toxics Release Inventory (TRI). Such a requirement informs

the public and allows individuals to minimize or avert exposure to toxic substances. The requirement also creates negative publicity which imposes a cost onfirms and provides incentives to reduce the production of or prevent the release of toxic chemicals. This paper studies the role of the print media in generating such negative publicity. Specifically, it studies the role the media played when the TRI program wasfirst implemented. With limited preconceived notions about the polluting behavior of facilities around the early years of TRI reporting, media re- sponses at this time provide a rare opportunity to isolate and study the behavior of the media to new pollution news and study how TRI establishments responded to a sudden wave of media attention.

This paper takes two perspectives on the relationship between media attention and toxic releases. Itfirst studies the degree to which neighbor- hood characteristics like racial composition and income associate with the number of newspaper articles written about an establishment, con- trolling for the volume of toxic releases, industry and observable estab- lishment characteristics. The results will show little association between non-white neighborhoods and media reporting. The empirical analysis then uses a difference-in-difference approach to show that facilities that receive media attention reduce toxic releases dramatically more than facilities that do not. Furthermore, establishments in non-white neigh- borhoods are more likely to reduce releases.

The results contribute to the research on"environmental justice,"the concept that environmental risks and hazards should be equitably distributed regardless of race, color or income. Prior studies on envi- ronmental justice don't incorporate the media and instead typically focus directly on the behavior of and location decisions of individuals andfirms (Boer et al., 1997; Wolverton, 2009; Zimmerman, 1993). There are a number of reasons to believe that neighborhood charac- teristics like income or racial composition can affect the media's deci- sion to report about a particular establishment. Choices over what to report are influenced by the preferences and worldviews of reporters, editors and the newspaper owner (Bennett, 1988; Entman and Rojecki, 2000; Groseclose and Milyo, 2005; Wilson and Gutirrez, 1995). If reporters or editors have a liberal stand on public policy issues, they may be more likely to cover issues related to the poor and racial minor- ities. On the other hand, the motive of profit maximization might lead them to report less on these neighborhoods. The largest media audience in the U.S. is white and middle-class (Larson, 2006; Shirley, 1992). Reporting about poor and minority neighborhoods may not appeal to these readers. Furthermore, the costs of reporting about toxic releases in high-income neighborhoods might be lower. If higher income neigh- borhoods are more vocal about their disamenities (and therefore more responsive to reporters), and lower income neighborhoods attach less weight to environmental quality, then toxic releases in higher income neighborhoods may get more attention.

To the extent that media activity is associated with neighborhood

characteristics, the second objective of this paper is to explore how

media activity might affect toxic releases. If media attention imposes

costs, facilities have incentives to change their subsequent behaviors.

Prior research on the TRI has explored numerous ways that the require-

ment to report releases affectsfirms, but to our knowledge no study has

focused on the relationship between TRI-related media attention and behavior of the facilities. the differences in difference approach used in this study aims to provide insight into this relationship. Although the results should not be interpreted causally, they do show that estab- lishments which receive media attention behave differently from the ones that do not. The remaining sections of this paper present a background of the TRI program and its association with environmental justice, data, mea- sures and the empirical strategies, and results. The section on resultsfirst identifies the association between media attention and neighbor- hood characteristics, and then shows results on how the toxic releases of establishments with media attention differ from the releases of those establishments without media attention.

2. Background

The TRI program was formulated under the Emergency Planning & Community Right-To-Know Act (EPCRA) of 1986, against the backdrop of a chemical accident at Union Carbide's chemical plant in Bhopal, India in 1984. EPCRA mandates that all U.S. manufacturing facilities, with at least 10 employees and producing more than 500 lb of each of the 320 listed chemicals, must annually report to the EPA. The EPA collects this information and catalogs it for public dissemination via its TRI database.

Thefirst wave of TRI reports, which reported about releases in 1987, was made publicly available on 19th June, 1989. Shortly there- after, the Natural Resources Defense Council (NRDC) and the National Wildlife Federation (NWF) published two specialized reports on the"top

The New York Times published a number of articles about economically

disadvantaged communities affected by pollution, and about the work

of grass roots activists (e.g.Suro, 1989). The head of the National Wild-

life Foundation contributed editorials calling for environmentalism to

"embrace the poor"(Hair, 1990). This interest is consistent with the

emerging focus on environmental justice (United Church of Christ,

1987; United States General Accounting Office, 1983). It is directly rele-

vant to our study since facilities subject to TRI reporting requirements

tend to be located in minority neighborhoods and these facilities also

tend to have higher toxic releases (Arora and Cason, 1999; Wolverton,

4

federal officials and surprised company executives. Event studies on the impact of the TRI reports on thefinancial market show that publicly traded TRIfirms experienced negative abnormal returns on the day following thefirst TRI report (Hamilton, 1995a). The release of data was viewed as a significant problem for several large companies with multiple TRI facilities. The trade journal,Chemical Week, cited"non-regulatory pressures, such as local and community concerns"as driving the industry's environmental performance (Rotman, 1989: p. 66). In fact, thefirms with largest negative abnormal stock returns were also the ones that reduced their toxic releases more than their industry peers (Konar and Cohen, 1997).

3. Data

This study uses toxic releases data from the TRI database, socio- economic characteristics from the 1990 U.S. Population Census, media attention data from the Lexis-Nexis Academic Universe database, and company level information about the TRI establishments from the Compustat North America from Standard and Poor's database. The TRI database contains detailed information about the toxic releases of all U.S. manufacturing facilities that submit toxic release reports to the TRI. There is a two-year gap between the data-reporting date and the date EPA publicly disseminates this information. Thefirst TRI report was available on 19th June, 1989 and contained information about the 1987 toxic releases of almost 24,000 facilities. These 1987 data were later removed from the TRI database, since there was a great deal of variance in how facilities estimated the quantity of toxics released and because two chemicals, that were released in large quantities, were later removed from the list of toxic substances. Since a part of this study focuses on media response to reported releases (regardless of

the accuracy of the underlying reports), the 1987 data is nonetheless

behavior of the facilities.

in this study aims to provide insight into this relationship. Although the results should not be interpreted causally, they do show that estab- lishments which receive media attention behave differently from the ones that do not.

polluters"of 1987 (Dean, 1989; Natural Resources Defense Council, (1989). Thesepublications,alongwiththeoriginalTRIreports,generated significant media activity including articles in major newspapers like USA TODAY, The Boston Globe, The Washington Post and The New York Times. Of the 326 facilities in our dataset that received some sort of media attention, 130 facilities come from the top 500 establishments reported in NWF's report identifying the"Toxic 500".

Reading print media stories about thefirst wave of TRI reports along with related articles from the same period reveals several facts that are relevant to our investigation. First, the press did express an interest in the links between pollution, citizen action groups, and socio-economic characteristics of affected populations. For example, The New York Times published a number of articles about economically disadvantaged communities affected by pollution, and about the work of grass roots activists (e.g.Suro, 1989). The head of the National Wild-

life Foundation contributed editorials calling for environmentalism to

"embrace the poor"(Hair, 1990). This interest is consistent with the

emerging focus on environmental justice (United Church of Christ,

1987; United States General Accounting Office, 1983). It is directly rele-

vant to our study since facilities subject to TRI reporting requirements

tend to be located in minority neighborhoods and these facilities also

tend to have higher toxic releases (Arora and Cason, 1999; Wolverton, (2009).

federal officials and surprised company executives. Event studies on the impact of the TRI reports on thefinancial market show that publicly traded TRIfirms experienced negative abnormal returns on the day following thefirst TRI report (Hamilton, 1995a). The release of data was viewed as a significant problem for several large companies with multiple TRI facilities. The trade journal,Chemical Week, cited"non-regulatory pressures, such as local and community concerns"as driving the industry's environmental performance (Rotman, 1989: p. 66). In fact, thefirms with largest negative abnormal stock returns were also the ones that reduced their toxic releases more than their industry peers (Konar and Cohen, 1997).

3. Data

This study uses toxic releases data from the TRI database, socio- economic characteristics from the 1990 U.S. Population Census, media attention data from the Lexis-Nexis Academic Universe database, and company level information about the TRI establishments from the Compustat North America from Standard and Poor's database. The TRI database contains detailed information about the toxic releases of all U.S. manufacturing facilities that submit toxic release reports to the TRI. There is a two-year gap between the data-reporting date and the date EPA publicly disseminates this information. Thefirst TRI report was available on 19th June, 1989 and contained information about the 1987 toxic releases of almost 24,000 facilities. These 1987 data were later removed from the TRI database, since there was a great deal of variance in how facilities estimated the quantity of toxics released and because two chemicals, that were released in large quantities, were later removed from the list of toxic substances. Since a part of this study focuses on media response to reported releases (regardless of

the accuracy of the underlying reports), the 1987 data is nonetheless appropriate.

appropriate.