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Should You Turn Yourself In? The Consequences of Environmental Self-Policing

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  • Sarah L. Stafford

    (Department of Economics, College of William and Mary)

Abstract

Facilities that self-police under the Environmental Protection AgencyÕs Audit Policy are eligible for reduced penalties on disclosed violations. This paper investigates whether self- policing has additional consequences, in particular whether self-policing reduces future enforcement activity. Using data on U.S. hazardous waste enforcement and disclosures, I find that facilities that self-police are rewarded with a lower probability of inspection in the future, although facilities with good compliance records may receive a smaller benefit than facilities with poor records. Additionally, facilities that are inspected frequently are more likely to disclose than facilities that face a low probability of inspection. The results suggest that facilities may be able to strategically disclose in order to decrease future enforcement.

Suggested Citation

  • Sarah L. Stafford, 2006. "Should You Turn Yourself In? The Consequences of Environmental Self-Policing," Working Papers 27, Department of Economics, College of William and Mary, revised 08 Sep 2006.
    • Handle: RePEc:cwm:wpaper:27
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    File URL: http://economics.wm.edu/wp/cwm_wp27rev2.pdf
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    References listed on IDEAS

    as
    1. Alexander Pfaff & Chris William Sanchirico, 2004. "Big field, small potatoes: An empirical assessment of EPA's self-audit policy," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 23(3), pages 415-432.
    2. Innes, Robert, 1999. "Remediation and self-reporting in optimal law enforcement," Journal of Public Economics, Elsevier, vol. 72(3), pages 379-393, June.
    3. Innes, Robert, 2001. "Violator Avoidance Activities and Self-Reporting in Optimal Law Enforcement," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 17(1), pages 239-256, April.
    4. Eric Helland, 1998. "The Enforcement Of Pollution Control Laws: Inspections, Violations, And Self-Reporting," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 141-153, February.
    5. Harrington, Winston, 1988. "Enforcement leverage when penalties are restricted," Journal of Public Economics, Elsevier, vol. 37(1), pages 29-53, October.
    6. King, Gary & Zeng, Langche, 2001. "Logistic Regression in Rare Events Data," Political Analysis, Cambridge University Press, vol. 9(2), pages 137-163, January.
    7. Sarah L. Stafford, 2006. "Self-Policing in a Targeted Enforcement Regime," Working Papers 26, Department of Economics, College of William and Mary.
    8. Morgenstern, Richard, 1996. "Does the Provision of Free Technical Information Really Influence Firm Behavior?," RFF Working Paper Series dp-96-16, Resources for the Future.
    9. Kaplow, Louis & Shavell, Steven, 1994. "Optimal Law Enforcement with Self-Reporting of Behavior," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 583-606, June.
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    Cited by:

    1. Sarah L. Stafford, 2006. "Self-Policing in a Targeted Enforcement Regime," Working Papers 26, Department of Economics, College of William and Mary.

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    More about this item

    Keywords

    Self-Policing; Enforcement; Targeting; Compliance; Hazardous Waste;
    All these keywords.

    JEL classification:

    • 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
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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