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Ambient environmental inspections followed by sequential firm inspections

Laurent Franckx ()

Energy, Transport and Environment Working Papers Series from KU Leuven, Department of Economics - Research Group Energy, Transport and Environment

Abstract: We consider an environmental enforcement agency who uses the measurement of ambient pollution to guide its inspections of individual polluters. We compare two different uses of this information. In a first model, the agency uses a ``threshold strategy": if ambient pollution exceeds an endogenous threshold, the agency inspects all individual polluters simultaneously. In a second model, the agency inspects polluters sequentially, and updates its beliefs after each firm inspection. If one ignores non-discrimination principles, and if the time span between two inspections is short enough, this sequential inspection policy is always superior to a simultaneous inspection policy.

Pages: 18 pages
Date: 2001-02
New Economics Papers: this item is included in nep-ene, nep-ent and nep-net
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Persistent link: https://EconPapers.repec.org/RePEc:ete:etewps:ete0104

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