Measurement error and state-dependent pollution control enforcement
A two-group model of state-dependent enforcement is applied to identical firms which minimize the expected present value of costs and fines. Measurement error affects the probabilities of transitions between groups and the receipt of fines. It is shown that state-dependent enforcement can reduce soc...
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| Veröffentlicht in: | Journal of environmental economics and management 1991-07, Vol.21 (1), p.67-81 |
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| container_title | Journal of environmental economics and management |
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| creator | Harford, Jon D |
| description | A two-group model of state-dependent enforcement is applied to identical firms which minimize the expected present value of costs and fines. Measurement error affects the probabilities of transitions between groups and the receipt of fines. It is shown that state-dependent enforcement can reduce social cost below the level attainable with static enforcement and that differentiation in both monitoring probabilities and standards may be optimal. However, setting fines for both groups at the maximum is likely to be optimal. Comparisons between models and alternative model interpretations are offered. |
| doi_str_mv | 10.1016/0095-0696(91)90005-4 |
| format | Article |
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| identifier | ISSN: 0095-0696 |
| ispartof | Journal of environmental economics and management, 1991-07, Vol.21 (1), p.67-81 |
| issn | 0095-0696 1096-0449 |
| language | eng |
| recordid | cdi_proquest_miscellaneous_37170476 |
| source | RePEc; Elsevier ScienceDirect Journals Complete; Periodicals Index Online |
| subjects | Cost control Economic models Economic theory Enforcement Measurement Pollution control Social costs State State laws Statistical analysis Studies |
| title | Measurement error and state-dependent pollution control enforcement |
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