Mandatory inspection and maintenance programs require on-road vehicles to be tested regularly and repaired if they are not in compliance with air emission regulations. We estimate the abatement cost function for a representative inspection and maintenance program. This is done by constructing a model of the statistical process that leads to non-compliance, parameterizing the model, and then by simulating the total abatement cost function. The model predicts that the marginal abatement cost for a major representative program is so high that even a small reduction in the abatement target leads to substantial cost savings to motorists. In addition, even for quite high levels of the abatement target, the optimal minimum testing age is substantially higher and the frequency of testing is much lower than is common in many jurisdictions. (A) Reprinted with permission from Elsevier.
Abstract