Enforcement and Environmental Compliance: A Statistical Analysis of the Pulp and Paper Industry

Jay Shimshack and Michael Ward

No 414, Discussion Papers Series, Department of Economics, Tufts University from Department of Economics, Tufts University

Abstract: This paper explores empirically the impact of changes of enforcement efforts on environmental compliance. Our strategy is to link observed fines and other enforcement actions to subsequent compliance behavior. We find that, on the margin, the impact of a fine for water pollutant violations is about a two-thirds reduction in the statewide violation rate in the year following a fine. This surprisingly large result obtains through the regulator’s enhanced reputation. We find that the deterrence impact on other firms in a state is almost as strong as the impact on the sanctioned firm. In contrast to fines, non-monetary sanctions contribute no detected impact on compliance.

Keywords: Fines; Reputation; Pollution; Compliance; Enforcement (search for similar items in EconPapers)
JEL-codes: D83 K32 Q25 (search for similar items in EconPapers)
Date: 2004
New Economics Papers: this item is included in nep-law and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:tuf:tuftec:0414

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