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Penalty Functions for Environmental Violations: Evidence from Water Quality Enforcement

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  • Oljaca, Neda
  • Keeler, Andrew G
  • Dorfman, Jeffrey

Abstract

We empirically estimate a penalty function for water quality violations of private firms in Georgia. We find that seriousness of infraction and historical compliance records strongly influence penalty levels, while the intentionality of violations and the method of discovery do not. The size of the polluting company is also an important determinant of financial penalties. Overall the results support the plausibility of modeling assumptions used in much of the theoretical enforcement literature but indicate the need for caution in interpreting models that assume penalty amounts are invariant to violation characteristics. Copyright 1998 by Kluwer Academic Publishers

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Bibliographic Info

Article provided by Springer in its journal Journal of Regulatory Economics.

Volume (Year): 14 (1998)
Issue (Month): 3 (November)
Pages: 255-64

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Handle: RePEc:kap:regeco:v:14:y:1998:i:3:p:255-64

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Web page: http://www.springerlink.com/link.asp?id=100298

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Cited by:
  1. Heyes, Anthony, 2002. "A Theory of Filtered Enforcement," Journal of Environmental Economics and Management, Elsevier, vol. 43(1), pages 34-46, January.
  2. Timothy N. Cason & Lata Gangadharan, 2004. "An Experimental Study of Compliance and Leverage in Auditing and Regulatory Enforcement," Department of Economics - Working Papers Series, The University of Melbourne 918, The University of Melbourne.
  3. Carmen Arguedas & Eva Camacho & José Zofío, 2010. "Environmental Policy Instruments: Technology Adoption Incentives with Imperfect Compliance," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 47(2), pages 261-274, October.
  4. Arguedas, Carmen, 2007. "To Comply or Not To Comply? Pollution Standard Setting Under Costly Monitoring and Sanctioning," Working Papers in Economic Theory 2007/13, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
  5. Takayoshi Shinkuma & Shunsuke Managi, 2012. "Effectiveness of policy against illegal disposal of waste," Environmental Economics and Policy Studies, Society for Environmental Economics and Policy Studies - SEEPS, Society for Environmental Economics and Policy Studies - SEEPS, vol. 14(2), pages 123-145, April.
  6. Gramig, Benjamin M. & Skees, Jerry R. & Black, J. Roy, 2004. "Utilizing Contingent Claims to Improve the Management of CAFOs," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 36(02), August.

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