Abstract
The study examines the association between the size of previous environmental sanction charges and subsequent compliance towards environmental regulations. Data used for the study come from about 9000 Swedish firms fined sometime between January 2002 and December 2012. Probabilities of compliance across various levels of sanctions are estimated using life-table methods and tested for equality using standard nonparametric methods. Association between size of sanction charges and subsequent behaviour is modelled by proportional hazard model for the rate of recidivism as well as by a family of flexible parametric accelerated failure-time models for the duration of compliance. The results show that duration of compliance may be described by a log-normal distribution. Further, it is demonstrated that sanctions charges do have significant detering effects on the risk of recidivism though the strength of the detering effect depends on whether or not we account for other possible correlates of recidivism. Possible explanations of the results and their policy implications are discussed; limitations of the current study highlighted; and potential extensions for future studies outlined.
Highlights
The overall aim of this paper is to measure the effect of environmental sanction charges on subsequent behavior with regard to violation to environmental regulations
The results show that reciprocal Weibull, Weibull, ’gamma’ and exponential models are rejected in favor of the more general extended generalized gamma (EGG) model
In the present study we have analyzed data on environmental recidivism among about 9000 Swedish firms which were fined with environmental sanction charges sometime between January 2002 and December 2012
Summary
The overall aim of this paper is to measure the effect of environmental sanction charges on subsequent behavior with regard to violation to environmental regulations. National and international environmental agencies use a wide range of indicators to assess environmental conditions in general and the efficiency of enforcement measures in particular One such measure suggested has been the extent of recidivism—the act of repeating violation to environmental regulations after a firm has been fined (penalized) for that behavior. These methods include Kaplan–Meier and Life Table methods for estimating survival functions; nonparametric Log-Rank and Breslow (Generalized Wilcoxon) tests for comparing the survival functions, Cox proportional hazard model for the rate of recidivism as well as a family of flexible parametric accelerated failure-time models for the duration of compliance. The last section ties up the contents of the paper in the form of concluding remarks, outline of limitations of the study, and potential extensions for further study
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