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Implementing Environmental Regulation: An Inter-industry Analysis


  • Christopher S. Decker

    () (University of Nebraska, Omaha)


Many studies show that inspections (or the threat there of) promote compliance with environmental law. Therefore, it is important to understand what influences inspections. Existing research tends to focus on plant characteristics when explaining inspections, often reporting conflicting results. In this paper I suggest that regulators may respond to industry-level attributes when deciding whom to inspect. I find that industries that garner a larger share of a state’s manufacturing employment are also inspected less frequently. Moreover, the effect is not limited to employment. Industries garnering a larger share of a state’s manufacturing gross state product are also inspected less frequently.

Suggested Citation

  • Christopher S. Decker, 2006. "Implementing Environmental Regulation: An Inter-industry Analysis," Eastern Economic Journal, Eastern Economic Association, vol. 32(1), pages 47-66, Winter.
  • Handle: RePEc:eej:eeconj:v:32:y:2006:i:1:p:47-66

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    References listed on IDEAS

    1. Wayne B. Gray, 1997. "Manufacturing Plant Location: Does State Pollution Regulation Matter?," NBER Working Papers 5880, National Bureau of Economic Research, Inc.
    2. Laplante, Benoit & Rilstone, Paul, 1996. "Environmental Inspections and Emissions of the Pulp and Paper Industry in Quebec," Journal of Environmental Economics and Management, Elsevier, vol. 31(1), pages 19-36, July.
    3. Deily, Mary E. & Gray, Wayne B., 1991. "Enforcement of pollution regulations in a declining industry," Journal of Environmental Economics and Management, Elsevier, vol. 21(3), pages 260-274, November.
    4. Harrington, Winston, 1988. "Enforcement leverage when penalties are restricted," Journal of Public Economics, Elsevier, vol. 37(1), pages 29-53, October.
    5. Noll, Roger G., 1989. "Economic perspectives on the politics of regulation," Handbook of Industrial Organization,in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 22, pages 1253-1287 Elsevier.
    6. Heyes, Anthony, 2000. "Implementing Environmental Regulation: Enforcement and Compliance," Journal of Regulatory Economics, Springer, vol. 17(2), pages 107-129, March.
    7. Joskow, Paul L, 1974. "Inflation and Environmental Concern: Structural Change in the Process of Public Utility Price Regulation," Journal of Law and Economics, University of Chicago Press, vol. 17(2), pages 291-327, October.
    8. Andrew Keeler, 1995. "Regulatory objectives and enforcement behavior," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 6(1), pages 73-85, July.
    9. Gray, Wayne B. & Deily, Mary E., 1996. "Compliance and Enforcement: Air Pollution Regulation in the U.S. Steel Industry," Journal of Environmental Economics and Management, Elsevier, vol. 31(1), pages 96-111, July.
    10. Cameron, A. Colin & Trivedi, Pravin K., 1990. "Regression-based tests for overdispersion in the Poisson model," Journal of Econometrics, Elsevier, vol. 46(3), pages 347-364, December.
    11. Nadeau, Louis W., 1997. "EPA Effectiveness at Reducing the Duration of Plant-Level Noncompliance," Journal of Environmental Economics and Management, Elsevier, vol. 34(1), pages 54-78, September.
    12. John A. List & Shelby Gerking, 2000. "Regulatory Federalism and Environmental Protection in the United States," Journal of Regional Science, Wiley Blackwell, vol. 40(3), pages 453-471.
    13. Mary K. Olson, 1997. "Firm Characteristics and the Speed of FDA Approval," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(1), pages 377-401, June.
    14. Jeremy Firestone, 2002. "Agency governance and enforcement: the influence of mission on environmental decisionmaking," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 21(3), pages 409-426.
    15. Dion, Catherine & Lanoie, Paul & Laplante, Benoit, 1998. "Monitoring of Pollution Regulation: Do Local Conditions Matter?," Journal of Regulatory Economics, Springer, vol. 13(1), pages 5-18, January.
    16. Grieson, Ronald E. & Singh, Nirvikar, 1990. "Regulating externalities through testing," Journal of Public Economics, Elsevier, vol. 41(3), pages 369-387, April.
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    Cited by:

    1. Arguedas, Carmen & Rousseau, Sandra, 2012. "Learning about compliance under asymmetric information," Resource and Energy Economics, Elsevier, vol. 34(1), pages 55-73.
    2. You Wu & Jichuan Sheng & Fang Huang, 2015. "China’s future investments in environmental protection and control of manufacturing industry: lessons from developed countries," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 77(3), pages 1889-1901, July.

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