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President Trump's Policy Shifts Offers a Test of Moral Hazard Theory
Friday, March 17, 2017 13:45
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This Houston Chronicle piece is worth reading. The new Trump Administration budget calls for eliminating funding for the U.S Chemical Safety Board. This agency investigates chemical spills. In the absence of such an entity (and thus a weakened deterrence effect), will polluters take less care and devote less effort to reduce spill risk? If this occurs, will there be more chemical spills? Who will bear the brunt of this damage? Future environmental economists have a nice “natural experiment” here (provided by the Trump Administration) for measuring the benefits of safety regulation. A nice event study design will be used by these researchers. Canada could be used as the control group because their regulation has not changed.
Source: http://greeneconomics.blogspot.com/2017/03/president-trumps-policy-shifts-offers.html
