IDEAS home Printed from https://ideas.repec.org/a/kap/enreec/v88y2025i3d10.1007_s10640-024-00940-4.html
   My bibliography  Save this article

How Does the Deterrence Effect of Regulatory Enforcement Differ Between Privately and Government-Owned Facilities?

Author

Listed:
  • Dietrich Earnhart

    (University of Kansas)

  • Sarah Jacobson

    (Williams College)

Abstract

Environmental protection laws apply to both privately owned and government-owned facilities. Regulatory agencies take actions against facilities to induce compliance. Privately owned and government-owned facilities’ responses to enforcement may differ because of differences in objective functions, constraints, and incentives. We ask: do privately owned facilities and government-owned facilities respond differently to inspections and enforcement actions? We answer this question in the context of the U.S. Clean Water Act. Our analysis exploits monthly data that cover major facilities in all sectors within six U.S. states, comprising over one-third of all the major facilities operating in the U.S., from 1997 to 2016. We distinguish between government-owned municipal wastewater facilities, i.e., publicly owned treatment works (POTWs), and other government-owned facilities, e.g., hospitals, power plants. We find that, conditioning on past violations, POTW facilities receive more regulatory enforcement than privately owned facilities, although this may not be driven solely by ownership type. On the other hand, non-POTW government-owned facilities receive less. More importantly, while we find no significant evidence of a deterrence effect of enforcement actions for privately owned facilities, both kinds of government-owned facilities show evidence of deterrence. Thus, in this context, enforcement against government-owned facilities is in some cases at least as strong as enforcement against privately owned facilities, and elicits a stronger deterrence response.

Suggested Citation

  • Dietrich Earnhart & Sarah Jacobson, 2025. "How Does the Deterrence Effect of Regulatory Enforcement Differ Between Privately and Government-Owned Facilities?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 88(3), pages 553-588, March.
  • Handle: RePEc:kap:enreec:v:88:y:2025:i:3:d:10.1007_s10640-024-00940-4
    DOI: 10.1007/s10640-024-00940-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10640-024-00940-4
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s10640-024-00940-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Enforcement; Deterrence; Ownership; Wastewater; Regulation; Pollution;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:88:y:2025:i:3:d:10.1007_s10640-024-00940-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.