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Environmental federalism refers to the debate over the 'optimal' level of government at which to delegate environmental policymaking. Although this issue receives widespread attention across the globe, opinions run the gamut. The diversity of views plays out in practice as well as different federations have 'resolved' the issue differently. With the United States alone, environmental authority has oscillated between periods of relatively greater centralized and decentralized control. This article seeks to accomplish two objectives in order to advance the literature. The first objective is to provide a brief overview of the two primary theoretical frameworks – Tiebout (1956) and models of interjurisdictional competition – used to explore the effects of the decentralization of policy decisions such as taxes, expenditures, environmental standards, etc. The reason for doing so is to illuminate the issues that play a fundamental role in conclusions regarding the 'optimal' allocation of environmental authority. The second objective is to then provide a comprehensive survey of the relevant empirical literatures. By doing so, the goal is to limit the scope of the debate over environmental federalism moving forward, as well as make clear where the gaps in empirical knowledge exist.

The impact of environmental abatement costs on the size distribution of manufacturing establishments in pollution‐intensive industries is analyzed. Utilizing both state‐ and industry‐specific measures of environmental regulation, a new and important interaction is discovered: Establishment size increases with state environmental abatement costs, but only in industries during periods of relatively high (national) pollution abatement intensity. Increased state environmental stringency during times when similar industries located in other states are not undertaking sufficient abatement expenditures leads to a decrease in establishment size. (JEL L11, L51, R38)

Even if free trade creates net welfare gains for a country as a whole, the associated distributional implications can undermine the political viability of free trade. We show that trade-related redistribution increases the political viability of free trade in the US. We do so by assessing the causal effect of expected redistribution associated with the US Trade Adjustment Assistance program on US Congressional voting behavior on eleven Free Trade Agreements (FTAs) between 2003 and 2011. We find that a one standard deviation increase in redistribution leads to more than a 3% point increase in the probability of voting in favor of an FTA for the median representative. In addition, a one standard deviation decrease in redistribution across the entire US would have precluded passage of two of the eleven FTAs in our sample.

Abstract
Assumptions of individual rationality and preference stability provide the foundation for a convenient and tractable modeling approach. While both of these assumptions have come under scrutiny in distinct literatures, the two lines of research remain disjointed. This study begins by explicitly linking the two literatures while providing insights into whether market experience mitigates one specific form of individual rationality—consistent preferences. Using field experimental data gathered from more than 800 experimental subjects, we find evidence that the market is a catalyst for this type of rationality. The study then focuses on aggregate market outcomes by examining empirically whether individual rationality of this sort is a prerequisite for market efficiency. Using a complementary field experiment, we gathered data from more than 380 subjects of age 6-18 in multi-lateral bargaining markets at a shopping mall. We find that our chosen market institution is a filter of irrationality: even when markets are populated solely by irrational buyers, aggregate market outcomes converge to the intersection of the supply and demand functions.

Abstract.  Empirical evidence of the impact of borders on international trade flows using the gravity equation approach abounds. This paper examines the empirical relevance of state borders in U.S. interstate trade for various specifications of the gravity equation. We find a large and economically significant subnational border effect for some specifications. However, two model specifications drastically reduce (if not eliminate) the border effect: (i) dynamic panel specifications controlling for past levels of trade and (ii) models conditioning on internal migration.

Abstract
We compare several income distributions in urban China in the late 1980s and mid-1990s using tests for stochastic dominance in order to decompose gender differentials. Examination of the entire distribution gives insight into the uniformity of such differentials across the distribution. Moreover, tests based on stochastic dominance allow for robust welfare comparisons. Our analysis reveals: (i) large and increasing differentials in predicted earnings across gender in the lower tail of the distribution, but few differences in the upper tail, (ii) discrimination explains one-third to one-half of the total predicted earnings differential in the lower tail of the distribution, and little of the disparity in the upper tail, (iii) gender equity has eroded during China's economic transition, particularly for the youngest cohort, and (iv) significant nonuniformities in earnings differentials suggest the need to broaden analyses of gender differentials to incorporate earnings dispersion.