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Voluntary-Threat Approaches to Reduce Ambient Water Pollution

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  • Jordan F. Suter
  • Kathleen Segerson
  • Christian A. Vossler
  • Gregory L. Poe

Abstract

This article considers the regulation of nonpoint source water pollution through the use of a voluntary-threat approach, which allows a polluter group to meet a standard voluntarily but imposes an ambient tax upon noncompliance. In particular, we develop an "endogenous" voluntary-threat approach that can be parameterized to induce compliance as a unique subgame perfect Nash equilibrium and eliminate zero-abatement equilibria. Experimental evidence on the proposed approach as well as the "exogenous" approach of Segerson and Wu (2006) suggests that the severity of the threatened tax and the opportunity for communication are critical in determining policy outcomes. Copyright 2010, Oxford University Press.

Suggested Citation

  • Jordan F. Suter & Kathleen Segerson & Christian A. Vossler & Gregory L. Poe, 2010. "Voluntary-Threat Approaches to Reduce Ambient Water Pollution," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(4), pages 1195-1213.
  • Handle: RePEc:oup:ajagec:v:92:y:2010:i:4:p:1195-1213
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Hamet SARR & Mohamed Ali BCHIR & François COCHARD & Anne ROZAN, 2016. "Nonpoint source pollution: An experimental investigation of the Average Pigouvian Tax," Working Papers 2016-05, CRESE.
    2. Marc Willinger & Nasreddine Ammar & Ahmed Ennasri, 2014. "Performance of the Ambient Tax: Does the Nature of the Damage Matter?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 59(3), pages 479-502, November.
    3. Anne-Sarah Chiambretto & Hubert Stahn, 2017. "Voluntary Management of Fisheries under an Uncertain Background Legislative Threat," AMSE Working Papers 1712, Aix-Marseille School of Economics, Marseille, France.
    4. John A. List & Michael K. Price, 2013. "Using Field Experiments in Environmental and Resource Economics," NBER Working Papers 19289, National Bureau of Economic Research, Inc.
    5. Hamet Sarr & Mohamed Bchir & Francois Cochard & Anne Rozan, 2016. "Nonpoint source pollution: An experimental investigation of the Average Pigouvian Tax," Working Papers hal-01375078, HAL.
    6. Vossler, Christian A. & Suter, Jordan F. & Poe, Gregory L., 2013. "Experimental evidence on dynamic pollution tax policies," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 101-115.
    7. John A. List & Michael K. Price, 2016. "Editor's Choice The Use of Field Experiments in Environmental and Resource Economics," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(2), pages 206-225.
    8. Kathleen Segerson, 2013. "Voluntary Approaches to Environmental Protection and Resource Management," Annual Review of Resource Economics, Annual Reviews, vol. 5(1), pages 161-180, June.
    9. Zinnia Mukherjee, 2016. "Controlling stochastic externalities with penalty threats: the case of bycatch," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 18(1), pages 93-113, January.
    10. François Cochard & Julie Le Gallo & Laurent Franckx, 2015. "Regulation Of Pollution In The Laboratory: Random Inspections, Ambient Inspections, And Commitment Problems," Bulletin of Economic Research, Wiley Blackwell, vol. 67(S1), pages 40-73, December.

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