Enforcement and Environmental Compliance: A Statistical Analysis of the Pulp and Paper Industry
AbstractThis paper explores empirically the impact of changes of enforcement efforts on environmental compliance. Our strategy is to link observed fines and other enforcement actions to subsequent compliance behavior. We find that, on the margin, the impact of a fine for water pollutant violations is about a two-thirds reduction in the statewide violation rate in the year following a fine. This surprisingly large result obtains through the regulator’s enhanced reputation. We find that the deterrence impact on other firms in a state is almost as strong as the impact on the sanctioned firm. In contrast to fines, non-monetary sanctions contribute no detected impact on compliance.
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Bibliographic InfoPaper provided by Department of Economics, Tufts University in its series Discussion Papers Series, Department of Economics, Tufts University with number 0414.
Date of creation: 2004
Date of revision:
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Fines; Reputation; Pollution; Compliance; Enforcement;
Find related papers by JEL classification:
- K32 - Law and Economics - - Other Substantive Areas of Law - - - Environmental, Health, and Safety Law
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-03-14 (All new papers)
- NEP-LAW-2004-03-14 (Law & Economics)
- NEP-MIC-2004-03-14 (Microeconomics)
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