1994 Reports

Evidence on Unobserved Polluter Abatement Effort

Kahn, Matthew E.

Unobserved polluter abatement effort is quantified by comparing the emissions of California cars and light trucks tested in a surprise versus and expected emissions test. California could have improved air quality at a lower social cost if drivers could be encouraged to invest more in maintenance effort. Implicit subsidies built into the system minimize the incentives to invest in maintenance.