▶︎ CANCELED: CANCELED | Ulric B. and Evelyn L. Bray Social Sciences Seminar
Title: Understanding Disparities in Punishment: Regulator Preferences and Expertise
Abstract: We exploit institutional changes in the enforcement of water quality regulations in California, and study regulatory discretion by identifying and estimating a structural model of strategic interactions between a regulator and a privately-informed discharger. We ﬁnd that even if the regulator's objective function were the same across dischargers, diﬀerences in the punishment of violations would mostly persist. Moreover, we quantify the extent to which employing regulators' knowledge about dischargers can be beneﬁcial. Speciﬁcally, we ﬁnd that limiting regulatory discretion would, on average, raise enforcement costs and increase violations by dischargers with relatively high beneﬁts of compliance.