IDEAS home Printed from https://ideas.repec.org/a/kap/enreec/v8y1996i2p183-204.html
   My bibliography  Save this article

Effectiveness of environmental regulations under imperfect enforcement and the firm's avoidance behavior

Author

Listed:
  • Chung-Huang Huang

Abstract

This paper explicitly defines enforcement quality and develops a model by incorporating enforcement quality and the firm's avoidance behavior. The results indicate that the effectiveness of environmental regulations is likely to depend upon the level of enforcement quality, as well as upon the nature of the firm's avoidance behavior. Policy instruments may become incompatible under certain circumstances. Enforcement quality should be properly targeted to enhance functional harmonization between instruments. The condition under which emission tax is more effective under imperfect enforcement than under complete enforcement is also identified. Copyright Kluwer Academic Publishers 1996

Suggested Citation

  • Chung-Huang Huang, 1996. "Effectiveness of environmental regulations under imperfect enforcement and the firm's avoidance behavior," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 8(2), pages 183-204, September.
    • Handle: RePEc:kap:enreec:v:8:y:1996:i:2:p:183-204
    DOI: 10.1007/BF00357363
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/BF00357363
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/BF00357363?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kenneth L. Wertz, 1974. "Short-run Effects of an Increased Effluent Charge in a Competitive Market," Canadian Journal of Economics, Canadian Economics Association, vol. 7(4), pages 676-682, November.
    2. Zuckerman, Stephen & Hadley, Jack & Iezzoni, Lisa, 1994. "Measuring hospital efficiency with frontier cost functions," Journal of Health Economics, Elsevier, vol. 13(3), pages 255-280, October.
    3. Jeremy Greenwood & R. Preston McAfee, 1991. "Externalities and Asymmetric Information," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(1), pages 103-121.
    4. Epple, Dennis & Visscher, Michael, 1984. "Environmental Pollution: Modeling Occurrence, Detection, and Deterrence," Journal of Law and Economics, University of Chicago Press, vol. 27(1), pages 29-60, April.
    5. Xepapadeas, A. P., 1991. "Environmental policy under imperfect information: Incentives and moral hazard," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 113-126, March.
    6. Mitchell Polinsky, A. & Shavell, Steven, 1982. "Pigouvian taxation with administrative costs," Journal of Public Economics, Elsevier, vol. 19(3), pages 385-394, December.
    7. Roberts, Marc J. & Spence, Michael, 1976. "Effluent charges and licenses under uncertainty," Journal of Public Economics, Elsevier, vol. 5(3-4), pages 193-208.
    8. Kambhu, John, 1990. "Direct controls and incentives systems of regulation," Journal of Environmental Economics and Management, Elsevier, vol. 18(2), pages 72-85, March.
    9. Jones, Carol Adaire & Scotchmer, Suzanne, 1990. "The social cost of uniform regulatory standards in a hierarchical government," Journal of Environmental Economics and Management, Elsevier, vol. 19(1), pages 61-72, July.
    10. Shaffer, Sherrill, 1990. "Regulatory Compliance with Nonlinear Penalties," Journal of Regulatory Economics, Springer, vol. 2(1), pages 99-103, March.
    11. Dewees, Donald N, 1983. "Instrument Choice in Environmental Policy," Economic Inquiry, Western Economic Association International, vol. 21(1), pages 53-71, January.
    12. Schmidt, Peter & Knox Lovell, C. A., 1979. "Estimating technical and allocative inefficiency relative to stochastic production and cost frontiers," Journal of Econometrics, Elsevier, vol. 9(3), pages 343-366, February.
    13. 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.
    14. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249, January.
    15. Linder, Stephen H. & McBride, Mark E., 1984. "Enforcement costs and regulatory reform: The agency and firm response," Journal of Environmental Economics and Management, Elsevier, vol. 11(4), pages 327-346, December.
    16. Downing, Paul B. & Watson, William Jr., 1974. "The economics of enforcing air pollution controls," Journal of Environmental Economics and Management, Elsevier, vol. 1(3), pages 219-236, November.
    17. Joel S. Demski & David E.M. Sappington, 1987. "Hierarchical Regulatory Control," RAND Journal of Economics, The RAND Corporation, vol. 18(3), pages 369-383, Autumn.
    18. Kopp, Raymond J. & Diewert, W. Erwin, 1982. "The decomposition of frontier cost function deviations into measures of technical and allocative efficiency," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 319-331, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jin-Li Hu & Chung-Huang Huang & Wei-Kai Chu, 2004. "Bribery, hierarchical government, and incomplete environmental enforcement," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 6(3), pages 177-196, September.
    2. Laurent Franckx, 2004. "Marginal Deterrence Through Ambient Environmental Inspections," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(4), pages 507-527, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jin-Li Hu & Chung-Huang Huang & Wei-Kai Chu, 2004. "Bribery, hierarchical government, and incomplete environmental enforcement," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 6(3), pages 177-196, September.
    2. 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.
    3. Jack, William, 1992. "Power sharing and pollution control : coordinating policies among levels of government," Policy Research Working Paper Series 887, The World Bank.
    4. Bovenberg, A. Lans & Goulder, Lawrence H., 2002. "Environmental taxation and regulation," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 23, pages 1471-1545, Elsevier.
    5. Batabyal, Amitrajeet A., 1995. "Leading issues in domestic environmental regulation: A review essay," Ecological Economics, Elsevier, vol. 12(1), pages 23-39, January.
    6. Arguedas, Carmen & Rousseau, Sandra, 2009. "A note on the complementarity of uniform emission standards and monitoring strategies," Working Papers 2009/12, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
    7. Dasgupta, Susmita & Laplante, Benoit & Namingi, Nlandu & Hua Wang, 2000. "Industrial environmental performance in China - the impact of inspections," Policy Research Working Paper Series 2285, The World Bank.
    8. Arguedas, Carmen & Cabo, Francisco & Martín-Herrán, Guiomar, 2020. "Enforcing regulatory standards in stock pollution problems," Journal of Environmental Economics and Management, Elsevier, vol. 100(C).
    9. Rohling, Moritz & Ohndorf, Markus, 2012. "Prices vs. Quantities with fiscal cushioning," Resource and Energy Economics, Elsevier, vol. 34(2), pages 169-187.
    10. 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.
    11. Carmen Arguedas & Francisco Cabo & Guiomar Martín-Herrán, 2017. "Optimal Pollution Standards and Non-compliance in a Dynamic Framework," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(3), pages 537-567, November.
    12. Khanna, Madhu & Zilberman, David, 1997. "Incentives, precision technology and environmental protection," Ecological Economics, Elsevier, vol. 23(1), pages 25-43, October.
    13. Caplan, Arthur J., 2003. "Reputation and the control of pollution," Ecological Economics, Elsevier, vol. 47(2-3), pages 197-212, December.
    14. James Shortle & Richard D. Horan, 2017. "Nutrient Pollution: A Wicked Challenge for Economic Instruments," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(02), pages 1-39, April.
    15. Lehmann, Paul, 2008. "Using a policy mix for pollution control: A review of economic literature," UFZ Discussion Papers 4/2008, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    16. Jon Harford, 1998. "Pollution and the firm Robert E. Kohn Edward Elgar, 1998, 251 pp," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 26(3), pages 317-324, September.
    17. Villegas, Clara & Coria, Jessica, 2009. "Taxes, Permits and the Adoption of Abatement Technology under Imperfect Compliance," Working Papers in Economics 368, University of Gothenburg, Department of Economics.
    18. Shigeru Matsumoto & Kenji Takeuchi, 2011. "The effect of community characteristics on the frequency of illegal dumping," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 13(3), pages 177-193, September.
    19. Garvie, Devon & Keeler, Andrew, 1993. "Incomplete Enforcement with Endogenous Regulatory Choice," Queen's Institute for Economic Research Discussion Papers 275224, Queen's University - Department of Economics.
    20. Ya-Po Yang & Jin-Li Hu, 2012. "Gresham’s law in environmental protection," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 14(2), pages 103-122, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:8:y:1996:i:2:p:183-204. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.