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Should You Turn Yourself In? The Consequences of Environmental Self-Policing

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  • Sarah L. Stafford

    () (Department of Economics, College of William and Mary)

Abstract

Facilities that self-police under the Environmental Protection AgencyÕs Audit Policy are eligible for reduced penalties on disclosed violations. This paper investigates whether self- policing has additional consequences, in particular whether self-policing reduces future enforcement activity. Using data on U.S. hazardous waste enforcement and disclosures, I find that facilities that self-police are rewarded with a lower probability of inspection in the future, although facilities with good compliance records may receive a smaller benefit than facilities with poor records. Additionally, facilities that are inspected frequently are more likely to disclose than facilities that face a low probability of inspection. The results suggest that facilities may be able to strategically disclose in order to decrease future enforcement.

Suggested Citation

  • Sarah L. Stafford, 2006. "Should You Turn Yourself In? The Consequences of Environmental Self-Policing," Working Papers 27, Department of Economics, College of William and Mary, revised 08 Sep 2006.
  • Handle: RePEc:cwm:wpaper:27
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    File URL: http://economics.wm.edu/wp/cwm_wp27rev2.pdf
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    References listed on IDEAS

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    1. Alexander Pfaff & Chris William Sanchirico, 2004. "Big field, small potatoes: An empirical assessment of EPA's self-audit policy," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 23(3), pages 415-432.
    2. Innes, Robert, 1999. "Remediation and self-reporting in optimal law enforcement," Journal of Public Economics, Elsevier, vol. 72(3), pages 379-393, June.
    3. Innes, Robert, 2001. "Violator Avoidance Activities and Self-Reporting in Optimal Law Enforcement," Journal of Law, Economics, and Organization, Oxford University Press, vol. 17(1), pages 239-256, April.
    4. Sarah L. Stafford, 2006. "Self-Policing in a Targeted Enforcement Regime," Working Papers 26, Department of Economics, College of William and Mary.
    5. Eric Helland, 1998. "The Enforcement Of Pollution Control Laws: Inspections, Violations, And Self-Reporting," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 141-153, February.
    6. Harrington, Winston, 1988. "Enforcement leverage when penalties are restricted," Journal of Public Economics, Elsevier, vol. 37(1), pages 29-53, October.
    7. Kaplow, Louis & Shavell, Steven, 1994. "Optimal Law Enforcement with Self-Reporting of Behavior," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 583-606, June.
    8. Morgenstern, Richard, 1996. "Does the Provision of Free Technical Information Really Influence Firm Behavior?," Discussion Papers dp-96-16, Resources For the Future.
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    Cited by:

    1. Sarah L. Stafford, 2006. "Self-Policing in a Targeted Enforcement Regime," Working Papers 26, Department of Economics, College of William and Mary.

    More about this item

    Keywords

    Self-Policing; Enforcement; Targeting; Compliance; Hazardous Waste;

    JEL classification:

    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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