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Strategic Behaviors Toward Environmental Regulation: A Case Of Trucking Industry

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  • TERENCE LAM
  • CHARLES BAUSELL

Abstract

We used trucking industry’s response to the U.S. Environmental Protection Agency’s acceleration of 2004 diesel emissions standards as a case study to examine the importance of accounting for regulatees’ strategic behaviors in drafting of environmental regulations. Our analysis of the time series data of aggregate U.S. and Canada heavy‐duty truck production data from 1992 through 2003 found that heavy‐duty trucks production increased by 20%–23% in the 6 mo prior to the date of compliance. The increases might be due to truck operators pre‐buying trucks with less expensive but noncompliant engines and behaving strategically in anticipation of other uncertainties. (JEL L51, Q25)

Suggested Citation

  • Terence Lam & Charles Bausell, 2007. "Strategic Behaviors Toward Environmental Regulation: A Case Of Trucking Industry," Contemporary Economic Policy, Western Economic Association International, vol. 25(1), pages 3-13, January.
    • Handle: RePEc:bla:coecpo:v:25:y:2007:i:1:p:3-13
    DOI: 10.1111/j.1465-7287.2006.00030.x
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    Cited by:

    1. Dugan, Michael T. & Turner, Elizabeth H. & Thompson, Mark A. & Murray, Susan M., 2017. "Measuring the financial impact of environmental regulations on the trucking industry," Research in Accounting Regulation, Elsevier, vol. 29(2), pages 152-158.
    2. Rittenhouse, Katherine & Zaragoza-Watkins, Matthew, 2018. "Anticipation and environmental regulation," Journal of Environmental Economics and Management, Elsevier, vol. 89(C), pages 255-277.

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    More about this item

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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