Can Consumers Enforce Environmental Regulations? The Role of the Market in Hazardous Waste Compliance
To assess the role that consumers can play in encouraging environmental compliance, we examine the U.S. hazardous waste management industry to determine (1) whether environmental performance affects consumer demand and (2) whether markets affect compliance behavior. We find that noncompliance does decrease demand, at least in the short-term. While we do not find any evidence that market size affects compliance, local competition does appear to increase compliance. However, as competition becomes less localized, it has a smaller, if any, effect. Finally, regardless of the pressures exerted by consumers to comply, commercial managers are more likely to violate than on-site managers.
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