Abstract
Since 1973, the Pollution Abatement Costs and Expenditures (PACE) survey has been the principle source of information on US industries' capital expenditure and operating costs associated with pollution abatement efforts. The PACE survey was discontinued after 1994 and then revived and substantially revised in 1999, making longitudinal analysis quite difficult. Conceptual differences include matters as fundamental as the scope and meaning of pollution abatement as well as the definition of operating costs. Other critical changes include industrial coverage and sample selection. This paper is the first to comprehensively document the many changes in the PACE survey across these years and to provide detailed guidance to researchers and policymakers wishing to compare the 1994 and 1999 data. Overall, we find environmental spending by the manufacturing sector declined 27% between these years, with significant heterogeneity across industries. We discuss potential reasons for this dramatic decline, focusing mainly on survey methodology and design.