Emissions Control and the Regulation of Product Markets: The Case of Automobiles

The paper investigates alternative policies to regulate emissions from polluting product markets, specifically considering the case of the automobiles market. The two policies we consider are: a quota that limits the quantity produced of the polluting model and a more flexible average efficiency standard that requires a minimum energy efficiency across all models produced by a firm, similar to the US Corporate Average Fuel Economy (CAFE) standards. We use a duopoly model of vertical differentiation where firms produce both an economy (i.e., low polluting) version and a luxury (i.e., high polluting) version of a given product. We show that while a quota can raise firm profit over a certain range, CAFE always reduces firm profit relative to the pre-regulation. We also show that while the quota reduces emissions, it is possible that emissions increase under CAFE. The optimal policy choice will depend on the magnitude of unit damages. We show that when unit damages are sufficiently high, the quota policy is more efficient than the average efficiency standard. This suggests that instead of tightening CAFE to limit damages from emissions, policy makers can shift to a quota policy which is both welfare enhancing and more profitable for firms.

Targeting Special Populations for Family Preservation: The Influence of Worker Competence and Organizational Culture

Today there are approximately 581,000 children in the United States foster care system. Children of color, one special population group, are disproportionately represented in the foster care system. Family preservation, a program that aims to improve family functioning and thus decrease the need for foster care, has been examined closely. Some researchers believe that family preservation programs have failed partly due to practitioners' inability to target appropriate families (Feldman, 1990; Schuerman, Rzepnicki & Littell, 1994). Additionally, research confirms that children of color are not the target of family preservation services (Denby, Curtis, & Alford, 1998). Improvements in the effectiveness of family preservation will require many types of reform both internal and external to the program. Among the types of internal reform needed is accurate "targeting of services. " Given the overrepresentation of children of color in the foster care system, this group must be among those who are targeted for services. The results of a national survey of 254 family preservation workers reveal a "profile" of the worker who is likely to target special populations, including children of color, for family preservation services. A case is made for service improvements and training to facilitate the "profiled" workers' competencies.