Escalation of scrutiny: The gains from dynamic enforcement of environmental regulations

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

The US Environmental Protection Agency (EPA) uses a dynamic approach to enforcing air pollution regulations, with repeat offenders subject to high fines and designation as high priority violators (HPV). We estimate the value of dynamic enforcement by developing and estimating a dynamic model of a plant and regulator, where plants decide when to invest in pollution abatement technologies. We use a fixed grid approach to estimate random coefficient specifications. Investment, fines, and HPV designation are costly to most plants. Eliminating dynamic enforcement would raise pollution damages by 164 percent with constant fines or raise fines by 519 percent with constant pollution damages.

Original languageEnglish (US)
Pages (from-to)2558-2585
Number of pages28
JournalAmerican Economic Review
Volume110
Issue number8
DOIs
StatePublished - Aug 2020

ASJC Scopus subject areas

  • Economics and Econometrics

Fingerprint Dive into the research topics of 'Escalation of scrutiny: The gains from dynamic enforcement of environmental regulations'. Together they form a unique fingerprint.

Cite this