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Environmental Regulations and Social Norms

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Author Info
Ching-Chong Lai ()
Chih-Yu Yang
Juin-Jen Chang
Abstract

The evidence suggests that a surprisingly large number of firms comply with pollution standards even though expected penalties for non-compliance are quite low. This paper establishes an environmental social norm model that embodies collective environmental actions among firms. It provides a plausible explanation for these puzzling empirical findings. In this social norm framework, we also explore how the extrinsic pricing incentive affects the intrinsic environmental morale among firms. By taking into account the crowding-out effect of pricing incentives, we show that pollution taxes may not be an effective tool in fighting pollution. Copyright Kluwer Academic Publishers 2003

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File URL: http://hdl.handle.net/10.1023/A:1022229029894
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Publisher Info
Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 10 (2003)
Issue (Month): 1 (January)
Pages: 63-75
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:kap:apfinm:v:10:y:2003:i:1:p:63-75

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Web page: http://springerlink.metapress.com/link.asp?id=102851

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Related research
Keywords: environmental regulations; social norm; environmental compliance;

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June. [Downloadable!] (restricted)
  2. Harford, Jon D., 1987. "Self-reporting of pollution and the firm's behavior under imperfectly enforceable regulations," Journal of Environmental Economics and Management, Elsevier, vol. 14(3), pages 293-303, September. [Downloadable!] (restricted)
  3. Heyes, Anthony, 2001. "Honesty in a regulatory context - good thing or bad?," European Economic Review, Elsevier, vol. 45(2), pages 215-232, February. [Downloadable!] (restricted)
    Other versions:
  4. Hannelore Weck-Hannemann & Werner W. Pommerehne, 1989. "Einkommensteuerhinterziehung in der Schweiz: Eine empirische Analyse," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 125(IV), pages 515-556, December. [Downloadable!]
  5. Frey, Bruno S., 1993. "Motivation as a limit to pricing," Journal of Economic Psychology, Elsevier, vol. 14(4), pages 635-664, December. [Downloadable!] (restricted)
  6. Farzin, Y H & Kort, P M, 2000. " Pollution Abatement Investment When Environmental Regulation Is Uncertain," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 2(2), pages 183-212. [Downloadable!] (restricted)
  7. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall. [Downloadable!] (restricted)
  8. Hoel, Michael, 1998. " Emission Taxes versus Other Environmental Policies," Scandinavian Journal of Economics, Blackwell Publishing, vol. 100(1), pages 79-104, March. [Downloadable!] (restricted)
  9. Jensen, Richard, 1992. "Reputational spillovers, innovation, licensing, and entry," International Journal of Industrial Organization, Elsevier, vol. 10(2), pages 193-212, June. [Downloadable!] (restricted)
  10. Harford, Jon D. & Harrington, Winston, 1991. "A reconsideration of enforcement leverage when penalties are restricted," Journal of Public Economics, Elsevier, vol. 45(3), pages 391-395, August. [Downloadable!] (restricted)
  11. Per Fredriksson, 2001. "How Pollution Taxes may Increase Pollution and Reduce Net Revenues," Public Choice, Springer, vol. 107(1), pages 65-85, April. [Downloadable!] (restricted)
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  12. Amacher, Gregory S. & Malik, Arun S., 1996. "Bargaining in Environmental Regulation and the Ideal Regulator," Journal of Environmental Economics and Management, Elsevier, vol. 30(2), pages 233-253, March. [Downloadable!] (restricted)
  13. Harrington, Winston, 1988. "Enforcement leverage when penalties are restricted," Journal of Public Economics, Elsevier, vol. 37(1), pages 29-53, October. [Downloadable!] (restricted)
  14. Harford, Jon D., 1978. "Firm behavior under imperfectly enforceable pollution standards and taxes," Journal of Environmental Economics and Management, Elsevier, vol. 5(1), pages 26-43, March. [Downloadable!] (restricted)
  15. Florens, Jean-Pierre & Foucher, Caroline, 1999. "Pollution Monitoring: Optimal Design of Inspection--An Economic Analysis of the Use of Satellite Information to Deter Oil Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 38(1), pages 81-96, July. [Downloadable!] (restricted)
  16. Philippe Bontems & Gilles Rotillon, 2000. "Honesty in Environmental Compliance Games," European Journal of Law and Economics, Springer, vol. 10(1), pages 31-41, July. [Downloadable!] (restricted)
  17. Livernois, John & McKenna, C. J., 1999. "Truth or consequences: Enforcing pollution standards with self-reporting," Journal of Public Economics, Elsevier, vol. 71(3), pages 415-440, March. [Downloadable!] (restricted)
  18. Posner, Richard A, 1997. "Social Norms and the Law: An Economic Approach," American Economic Review, American Economic Association, vol. 87(2), pages 365-69, May. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Tor Helge Holmås & Egil Kjerstad & Hilde Lurås & Odd Rune Straume, 2008. "Does monetary punishment crowd out pro-social motivation? The case of hospital bed-blocking," NIPE Working Papers 17/2008, NIPE - Universidade do Minho. [Downloadable!]
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