Environmental recidivism in Sweden: distributional shape and effects of sanctions on duration of compliance

Quality & Quantity, Mar 2017

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.

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Environmental recidivism in Sweden: distributional shape and effects of sanctions on duration of compliance

Environmental recidivism in Sweden: distributional shape and effects of sanctions on duration of compliance Gebrenegus Ghilagaber 0 0 Department of Statistics, Stockholm University , 106 91 Stockholm , Sweden 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. Environmental regulations; Environmental sanctions charges; Time to re-offens; Modelling duration data; Recidivism; Sweden 1 Introduction 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. Effect, in turn, is defined as a change that has occurred as a result of a specific measure taken—that otherwise would not have occurred or occurred at a latter time. It is then clear that it is not & Gebrenegus Ghilagaber an easy task to measure effect as there are many variables which may influence environmental behavior of firms and individuals and the state of the environment, irrespective of enforcement actions. Further, substantial time may elapse between the application of enforcement measures and changes made evident in the environment. 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. Rates of recidivism and the duration in compliance have been suggested as output measures (International Network for Environmental Compliance and Enforcement 2008). Potential flaws in using recidivism ratios as measures of regulatory efficiency is outlined in a report by U.S. Environmental Protection Agency—Office of Enforcement and Compliance Assurance (2008). The main concern is that it is not possible to generalize observed recidivism rates among facilities which were inspected to those which were not inspected because some entities will be missed committing acts which, if they were caught to do so, would constitute recidivism. Because of this drawback, it is suggested to use a measure of chronic noncompliance as an alternative to recidivism rates. A potentially useful formulation of chronic recidivism suggested in the literature is the average or median length of time facilities/firms spend in compliance/noncompliance. However, little is known about the empirics of environmental recidivism. In particular, to the best of our knowledge, there has not been any study proposing appropriate statistical methods to analyze data on length of compliance (time to recidivism) and model its association with background characteristics of facilities. This paper attempts to fill this gap in the literature by presenting a number of statistical procedures of varying degree of complexity. The procedures are then illustrated using data on about 9000 Swedish firms which were fined sometime between January 2002 and December 2012. The goal of the study is to examine the effect of the size of sanction on the length of compliance. In Sect. 2, we describe the data in more details. Section 3 presents a number of appropriate statistical methods and illustrates them empirically. 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. 2 The data set Since 1999, the Swedish Environmenta (...truncated)


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Gebrenegus Ghilagaber. Environmental recidivism in Sweden: distributional shape and effects of sanctions on duration of compliance, Quality & Quantity, 2017, pp. 1-14, DOI: 10.1007/s11135-017-0493-8