Coase and Car Repair: Who Should Be Responsible for Emissions of Vehicles in Use?
This paper examines the current assignment of liability for in-use vehicle emissions and suggests some alternative policies that may reduce the cost and increase the effectiveness. The authors first discuss the cost, performance and incentives under current Inspection and Maintenance (I/M) programs, using the recently implemented Arizona "Enhanced I/M" program as an example. These programs were designed to identify and repair vehicles with malfunctioning emission control systems. Since their inception, however, I/M programs have been plagued by transaction costs that have drastically raised the cost of I/M as well as limited its effectiveness. These transaction costs fall into three categories: emission monitoring, repair avoidance, and non-transferability of emission reductions. The authors argue that most of these transaction costs can be attributed to the current assignment of liability for I/M to motorists, and they examine the potential for other liability assignments to reduce transaction costs and improve program efficiency. Among the alternative institutional arrangements discussed are greater imposition of liability on manufacturers, emission repair subsidies, repair liability auctions, and vehicle leasing.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Harrington, Winston, 1997. "Fuel Economy and Motor Vehicle Emissions," Journal of Environmental Economics and Management, Elsevier, vol. 33(3), pages 240-252, July.
- Thomas N. Hubbard, 1997. "Using Inspection And Maintenance Programs To Regulate Vehicle Emissions," Contemporary Economic Policy, Western Economic Association International, vol. 15(2), pages 52-62, 04.
- Thomas N. Hubbard, 1998. "An Empirical Examination of Moral Hazard in the Vehicle Inspection Market," RAND Journal of Economics, The RAND Corporation, vol. 29(2), pages 406-426, Summer.
- James Boyd, 1997. "'Green money' in the bank: firm responses to environmental financial responsibility rules," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 18(6), pages 491-506.
When requesting a correction, please mention this item's handle: RePEc:rff:dpaper:dp-99-22. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Webmaster)
If references are entirely missing, you can add them using this form.