Escalation of Scrutiny: The Gains from Dynamic Enforcement of Environmental Regulations
Publisher
AMER ECONOMIC ASSOCCitation
Blundell, Wesley, Gautam Gowrisankaran, and Ashley Langer. 2020. "Escalation of Scrutiny: The Gains from Dynamic Enforcement of Environmental Regulations." American Economic Review, 110 (8): 2558-85.Journal
AMERICAN ECONOMIC REVIEWRights
Copyright © 2020 American Economic Association. All rights reserved.Collection Information
This item from the UA Faculty Publications collection is made available by the University of Arizona with support from the University of Arizona Libraries. If you have questions, please contact us at repository@u.library.arizona.edu.Abstract
The US Environmental Protection Agency (EPA) uses a dynamic approach to enforcing air pollution regulations, with repeat offenders subject to high fines and designation as high priority violators (HPV). We estimate the value of dynamic enforcement by developing and estimating a dynamic model of a plant and regulator, where plants decide when to invest in pollution abatement technologies. We use a fixed grid approach to estimate random coefficient specifications. Investment, fines, and HPV designation are costly to most plants. Eliminating dynamic enforcement would raise pollution damages by 164 percent with constant fines or raise fines by 519 percent with constant pollution damages.Note
Immediate accessISSN
0002-8282EISSN
1944-7981Version
Final published versionae974a485f413a2113503eed53cd6c53
10.1257/aer.20181012
