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Enforcement of pollution levies in China

Author

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  • Lin, Liguo
Abstract
This paper investigates how industrial plants react to inspections conducted by environmental authorities under the pollution levy (taxation) regulation in China. Contrary to studies in the United States and Canada (Magat and Viscusi, 1990; Laplante and Rilstone, 1996), and previous studies in China (Dasgupta et al., 2001), we find that inspections increase plants' self-reported pollution by 3.45%. We provide a model to analyze plants' strategic reactions to the pollution levy regulation in China. The model concludes that under the specific regulation, plants' actual pollution might increase with inspections. Our study provides a key policy implication that inspections by environmental authorities in China are effective for verifying plants' self-reported pollution but not for reducing their pollution.

Suggested Citation

  • Lin, Liguo, 2013. "Enforcement of pollution levies in China," Journal of Public Economics, Elsevier, vol. 98(C), pages 32-43.
    • Handle: RePEc:eee:pubeco:v:98:y:2013:i:c:p:32-43
    DOI: 10.1016/j.jpubeco.2012.11.004
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    References listed on IDEAS

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    More about this item

    Keywords

    Enforcement; Inspections; Pollution levies; China;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • 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
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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