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Targeting Enforcement to Improve Compliance with Environmental Regulations

  • Friesen, Lana

By targeting enforcement efforts on specific segments of the regulated community, greater compliance with environmental regulations can be achieved. In this paper, the inspection minimizing targeting scheme with two groups is derived. Firms are moved at random into the target group, while escape from the target group occurs only when an inspection reveals the firm is in compliance. The optimal targeting scheme reduces inspection costs compared with the strategy suggested by Harrington (1988), where firms are moved into the target group on the basis of compliance record. However, the range of parameter values for which the optimal solution is feasible is limited.

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File URL: http://purl.umn.edu/125634
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Paper provided by Australian Agricultural and Resource Economics Society in its series 2001 Conference (45th), January 23-25, 2001, Adelaide with number 125634.

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Date of creation: Jan 2001
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Handle: RePEc:ags:aare01:125634
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  1. Garvie, Devon & Keeler, Andrew, 1994. "Incomplete enforcement with endogenous regulatory choice," Journal of Public Economics, Elsevier, vol. 55(1), pages 141-162, September.
  2. Raymond, Mark, 1999. "Enforcement leverage when penalties are restricted: a reconsideration under asymmetric information," Journal of Public Economics, Elsevier, vol. 73(2), pages 289-295, August.
  3. A. Mitchell Polinsky & Daniel L. Rubinfeld, 1991. "A Model of Optimal Fines for Repeat Offenders," NBER Working Papers 3739, National Bureau of Economic Research, Inc.
  4. Harford, Jon D. & Harrington, Winston, 1991. "A reconsideration of enforcement leverage when penalties are restricted," Journal of Public Economics, Elsevier, vol. 45(3), pages 391-395, August.
  5. Harrington, Winston, 1988. "Enforcement leverage when penalties are restricted," Journal of Public Economics, Elsevier, vol. 37(1), pages 29-53, October.
  6. Harford, Jon D., 1991. "Measurement error and state-dependent pollution control enforcement," Journal of Environmental Economics and Management, Elsevier, vol. 21(1), pages 67-81, July.
  7. Livernois, John & McKenna, C. J., 1999. "Truth or consequences: Enforcing pollution standards with self-reporting," Journal of Public Economics, Elsevier, vol. 71(3), pages 415-440, March.
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