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Should You Turn Yourself In? The Consequences of Environmental Self-Policing

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  • Sarah L. Stafford

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    (Department of Economics, College of William and Mary)

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    Abstract

    Facilities that self-police under the Environmental Protection AgencyÕs Audit Policy are eligible for reduced penalties on disclosed violations. This paper investigates whether self- policing has additional consequences, in particular whether self-policing reduces future enforcement activity. Using data on U.S. hazardous waste enforcement and disclosures, I find that facilities that self-police are rewarded with a lower probability of inspection in the future, although facilities with good compliance records may receive a smaller benefit than facilities with poor records. Additionally, facilities that are inspected frequently are more likely to disclose than facilities that face a low probability of inspection. The results suggest that facilities may be able to strategically disclose in order to decrease future enforcement.

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    File URL: http://economics.wm.edu/wp/cwm_wp27rev2.pdf
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    Bibliographic Info

    Paper provided by Department of Economics, College of William and Mary in its series Working Papers with number 27.

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    Length: 41 pages
    Date of creation: 23 Feb 2006
    Date of revision: 13 Jun 2006
    Handle: RePEc:cwm:wpaper:27

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    Keywords: Self-Policing; Enforcement; Targeting; Compliance; Hazardous Waste;

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    1. Eric Helland, 1998. "The Enforcement Of Pollution Control Laws: Inspections, Violations, And Self-Reporting," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 141-153, February.
    2. Sarah L. Stafford, 2006. "Self-Policing in a Targeted Enforcement Regime," Working Papers 26, Department of Economics, College of William and Mary.
    3. Innes, Robert, 2001. "Violator Avoidance Activities and Self-Reporting in Optimal Law Enforcement," Journal of Law, Economics and Organization, Oxford University Press, vol. 17(1), pages 239-56, April.
    4. Louis Kaplow & Steven Shavell, 1991. "Optimal Law Enforcement with Self-Reporting of Behavior," NBER Working Papers 3822, National Bureau of Economic Research, Inc.
    5. Morgenstern, Richard, 1996. "Does the Provision of Free Technical Information Really Influence Firm Behavior?," Discussion Papers dp-96-16, Resources For the Future.
    6. Innes, Robert, 1999. "Remediation and self-reporting in optimal law enforcement," Journal of Public Economics, Elsevier, vol. 72(3), pages 379-393, June.
    7. Alexander & Chris William Sanchirico & John Lee & Daniel Prager, 2002. "Big field, small potatoes: An empirical assessment of EPA's self-audit policy," Discussion Papers 0102-55, Columbia University, Department of Economics.
    8. Harrington, Winston, 1988. "Enforcement leverage when penalties are restricted," Journal of Public Economics, Elsevier, vol. 37(1), pages 29-53, October.
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    Cited by:
    1. Sarah L. Stafford, 2006. "Self-Policing in a Targeted Enforcement Regime," Working Papers 26, Department of Economics, College of William and Mary.

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