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The Effects of Community Characteristics on Polluter Compliance Levels

This paper analyzes the effects of community characteristics on compliance levels—emissions relative to effluent limits—at polluting facilities. In particular, it examines both direct effects and indirect effects; the second type of effects represents the linking of two related effects: (1) effects of community characteristics on regulatory decisions to intervene against specific facilities with inspections and penalties; and (2) effects of regulatory interventions on facility compliance levels. Estimation reveals (1) community characteristics significantly affect both regulatory interventions and facility performance; (2) direct effects and indirect effects are generally comparable in magnitude; and (3) total effects are economically meaningful. (JEL Q25)