(2005) Inspection Intensity and Market Structure, October 2005. Iowa State University
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Abstract
An investigation of financing an inspection policy while allowing the enforcement of a market regulation is described. A simple model shows that the intensity of controls depends on the market structure. Under a given number of firms, the per-firm probability of controls is lower than one, since firms’ incentive to comply with regulation holds under positive profits. In this case, a lump-sum tax is used for limiting distortions coming from financing with a fixed fee. Under free entry, the per-firm probability of controls is equal to one, and only a fixed fee that prevents excess entry is used to finance inspection.
| Item Type: | Departmental Report |
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| Keywords: | inspection policies, market regulation, regulatory funding |
| Subjects: | Business and industry > Economic forecasts Business and industry > Economic development Agriculture and food production > Agricultual statistics |
| ID Code: | 3045 |
| Deposited By: | Margaret Barr |
| Deposited On: | 17 Nov 2005 |
| Last Modified: | 17 Nov 2005 |
| URI: | https://publications.iowa.gov/id/eprint/3045 |