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- Title
THE ECONOMICS OF ATTRIBUTE-BASED REGULATION: THEORY AND EVIDENCE FROM FUEL ECONOMY STANDARDS.
- Authors
Ito, Koichiro; Sallee, James M.
- Abstract
We study attribute-based regulations, under which regulatory compliance of a firm, product, or individual depends on a secondary attribute that is not the intended target of the regulation. We develop a theoretical model of the welfare consequences of attribute basing, including its distortionary costs and potential benefits. We then quantify these welfare consequences using quasi-experimental evidence from weight-based fuel economy regulations.We use bunching analysis to showthat vehicle weight increased in response to regulation. We also leverage a policy change and develop a new method for analyzing double-notched policies to compare the costs and benefits of a specific attribute-based policy.
- Subjects
REGULATORY compliance; AUTOMOTIVE fuel consumption -- Government policy; PUBLIC finance; DIRECT costing
- Publication
Review of Economics & Statistics, 2018, Vol 100, Issue 2, p319
- ISSN
0034-6535
- Publication type
Article
- DOI
10.1162/rest_a_00704