The Revealed Preferences of State EPAs: Stringency, Enforcement, and Substitution

The EPA suggests states inspect polluters at least once a year and use sampling and nonsampling inspections equally. States face two separate pressures in their attempts to comply with these mandates: political and budgetary. Budgetary considerations arise because inspections are costly while political pressures arise because the stringency of enforcement, in part, determines the cost abatement. This study estimates the relative importance of political and budgetary pressures in the stringency with which the Clean Water Act is enforced. The results suggest that inspections determined by budgetary concerns and the stringency of inspections is determined, in part, by political factors.