Abstract
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)
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