Addressing Environmental Justice through In-Kind Court Settlements

Abstract

In US environmental court cases, a cash penalty can be mitigated if a defendant volunteers to undertake an in-kind project, such as retrofitting school buses or building a public park. A goal of the policy is to address environmental justice concerns for low-income and minority populations, yet the historical record shows in-kind settlements most likely occur in cases involving high-income, majority-White communities. A choice experiment reveals that the public prefers in-kind settlements over cash, and a randomized survey reveals in-kind settlements improve the public’s view of a violating firm, consistent with our finding of positive stock market reactions to in-kind settlements. (JEL D63, H23, J15, K32, Q53, Q58)