Unraveling deterrence effects of regulatory activities under Clean Water Act

Taro Mieno () and Nicholas Brozovic

No 124612, 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington from Agricultural and Applied Economics Association

Abstract: In this study, we empirically examine the effectiveness of regulatory actions on wastewater treatment plants in Illinois with careful attention to endogeneity issues that might have caused biased estimates in previous studies. We show that Pooled OLS and Fixed Effect models, which are the dominant estimation strategies in the literature, underestimate the effect of regulatory activities, giving rise to misleading conclusions on the effectiveness of regulatory activities. For example, in this particular application, Pooled OLS and Fixed Effects suggest that non-monetary sanctions "increase" emission levels and monetary sanctions have no deterrence effect. On the contrary, GMM suggests that non-monetary sanctions have no deterrence effect whereas monetary sanctions do have a deterrence effect. This suggests that reconsideration of the deterrence effect of regulatory activities may be worthwhile in other similar applications.

Keywords: Environmental Economics and Policy; Research Methods/ Statistical Methods (search for similar items in EconPapers)
Pages: 38
Date: 2012-06-02
New Economics Papers: this item is included in nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/124612/files/AAEA_Mieno_Brozovic.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea12:124612

DOI: 10.22004/ag.econ.124612

Access Statistics for this paper

More papers in 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().