Firm behavior under imperfectly enforceable pollution standards and taxes

Journal Article · Wed Mar 01 04:00:00 EST 1978 · J. Environ. Econ. Manage.; (United States)

DOI:https://doi.org/10.1016/0095-0696(78)90003-7· OSTI ID:6947294

Harford, J D

Assuming expected profit maximization, the behavior of the firm under imperfectly enforceable pollution standards is examined. Among other results, it is found that cost subsidies can reduce the size of violation and amount of wastes, and that the shape of the expected penalty function determines the direction of the firm response to tighter standards. Under imperfectly enforceable pollution taxes, it is found, among other results, that the firm's actual level of wastes is independent of proportional changes in the expected penalty for pollution tax evasion, and that the marginal cost of actual waste reduction equals the unit tax on reported wastes. Some normative aspects of the results are discussed. 15 references.

• Research Organization: State Univ. of New York, Albany
• OSTI ID: 6947294
• Journal Information: J. Environ. Econ. Manage.; (United States), Journal Name: J. Environ. Econ. Manage.; (United States) Vol. 5:1; ISSN JEEMD
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290300* -- Energy Planning & Policy-- Environment
Health
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500600 -- Environment
Atmospheric-- Regulations-- (-1989)
510600 -- Environment
Terrestrial-- Regulations-- (-1989)
520600 -- Environment
Aquatic-- Regulations -- (-1989)
54 ENVIRONMENTAL SCIENCES
COMMERCIAL SECTOR
COMPLIANCE
COST
ECONOMIC IMPACT
INDUSTRY
POLLUTION CONTROL
PROFITS
STANDARDS
TAXES
WASTES