Maximum Containment Level Regulation and its Violation: an Econometric Analysis of Drinking Water Systems in Arizona

Whereas a large number of empirical studies have been devoted to analyzing environmental compliance (EC) by firms, less attention has been paid to EC by Public Water Systems (PWS). To address this gap in the literature, this thesis uses data on Maximum Contaminants Levels (MCLs) compliance of 971 PWS in Arizona. Four measures of MCL compliance are employed: an event of MCL violation, repeated MCL violation, and numbers of MCL violations within two and three years after the highest enforcement action. Using Probit and Count data models, we find that both publicly and privately owned systems are more likely to violate MCL regulations than mixed-owned systems; larger systems and systems serving to communities have a higher likelihood of violating MCL regulation; systems serving to communities violate more frequently than others; higher level of enforcement is ineffective for MCL compliance; and the level of enforcement action is determined by the compliance history of a PWS.

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