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The impacts of the "right to know": Information disclosure and the violation of drinking water standards

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  • Bennear, Lori S.
  • Olmstead, Sheila M.
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    Abstract

    Information disclosure regulations are increasingly common, but their effects on the behavior of regulated firms are unclear. The 1996 Amendments to the Safe Drinking Water Act mandated that community drinking water suppliers issue to customers annual consumer confidence reports (CCRs), containing information on violations of drinking water regulations and on observed contaminant levels. We examine the impact of mandatory information provision on drinking water violations by 517 community water systems in the Commonwealth of Massachusetts from 1990 to 2003. Results suggest that larger utilities required to mail CCRs directly to customers reduced total violations by between 30% and 44% as a result of this policy, and reduced the more severe health violations by 40-57%.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

    Volume (Year): 56 (2008)
    Issue (Month): 2 (September)
    Pages: 117-130

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    Handle: RePEc:eee:jeeman:v:56:y:2008:i:2:p:117-130

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    Web page: http://www.elsevier.com/locate/inca/622870

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    References

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    Cited by:
    1. Nicholas, Powers & Blackman, Allen & Lyon, Thomas P. & Narain, Urvashi, 2008. "Does Disclosure Reduce Pollution? Evidence from India’s Green Rating Project," Discussion Papers dp-08-27-efd, Resources For the Future.
    2. Magali Delmas & Maria Montes-Sancho & Jay P. Shimshack, 2007. "Information Disclosure Policies: Evidence from the Electricity Industry," Discussion Papers Series, Department of Economics, Tufts University 0707, Department of Economics, Tufts University.
    3. David Dranove & Ginger Zhe Jin, 2010. "Quality Disclosure and Certification: Theory and Practice," Journal of Economic Literature, American Economic Association, vol. 48(4), pages 935-63, December.
    4. Ferraro, Paul J. & Miranda, Juan José, 2013. "Heterogeneous treatment effects and mechanisms in information-based environmental policies: Evidence from a large-scale field experiment," Resource and Energy Economics, Elsevier, vol. 35(3), pages 356-379.
    5. Allen Blackman & Sarah Darley & Thomas P. Lyon & Kris Wernstedt, 2010. "What Drives Participation in State Voluntary Cleanup Programs? Evidence from Oregon," Land Economics, University of Wisconsin Press, vol. 86(4), pages 785-799.
    6. Sheila M. Olmstead, 2010. "The Economics of Water Quality," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(1), pages 44-62, Winter.
    7. Blackman, Allen, 2009. "Alternative Pollution Control Policies in Developing Countries: Informal, Informational, and Voluntary," Discussion Papers dp-09-10, Resources For the Future.
    8. Seth M. Freedman & Melissa Schettini Kearney & Mara Lederman, 2009. "Product Recalls, Imperfect Information, and Spillover Effects: Lessons from the Consumer Response to the 2007 Toy Recalls," NBER Working Papers 15183, National Bureau of Economic Research, Inc.
    9. Hyunhoe Bae, 2012. "Reducing Environmental Risks by Information Disclosure: Evidence in Residential Lead Paint Disclosure Rule," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 31(2), pages 404-431, 03.
    10. Seo, Misuk & Pape, Andreas Duus, 2011. "Reports of Water Quality Violations induce Consumers to buy Bottled Water," MPRA Paper 28207, University Library of Munich, Germany.
    11. Timothy Simcoe & Michael W. Toffel, 2012. "Government Green Procurement Spillovers: Evidence from Municipal Building Policies in California," Harvard Business School Working Papers 13-030, Harvard Business School, revised May 2014.
    12. Lori Bennear & Alessandro Tarozzi & Alexander Pfaff & H. B. Soumya & Kazi Matin Ahmed & Alexander van Geen, 2010. "Bright Lines, Risk Beliefs, and Risk Avoidance: Evidence from a Randomized Intervention in Bangladesh," Working Papers 10-77, Duke University, Department of Economics.
    13. Donna Ramirez Harrington, 2013. "Effectiveness Of State Pollution Prevention Programs And Policies," Contemporary Economic Policy, Western Economic Association International, vol. 31(2), pages 255-278, 04.
    14. Vincze, János, 2010. "Miért és mitől védjük a fogyasztókat?. Aszimmetrikus információ és/vagy korlátozott racionalitás
      [Asymmetric information and/or bounded rationality: why are consumers protected and from
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 725-752.
    15. Anil R. Doshi & Glen W.S. Dowell & Michael W. Toffel, 2011. "How Firms Respond to Mandatory Information Disclosure," Harvard Business School Working Papers 12-001, Harvard Business School, revised Jun 2012.
    16. Madrigal, Roger & Alpizar, Francisco & Schluter, Achim, 2011. "Individual Perceptions and the Performance of Community-Based Drinking Water Organizations," Discussion Papers dp-11-07-efd, Resources For the Future.

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