Clean on Paper, Dirty on the Road: troubles with California’s Smog Check

Clean on Paper, Dirty on the Road: troubles with California’s Smog Check

Smog check programmes have failed for several reasons: (1) Current programmes only encourage cars to be clean on the inspection day and do little to deter motorists from tampering; (2) Although most emissions come from a few vehicles with high emissions, current programmes require inspection of all cars; (3) About half the cars repaired following an inspection have increased emissions.

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Deregulating Taxi Services: A Word of Caution

This paper studies pricing and capacity decisions in markets for phone-ordered taxicabs. Firms first choose capacities and then compete in prices. As firm demand increases, so does waiting time. This dampens competition and makes prices too high from the social point of view. Efficiency improves if firms choose large capacities. In a two-firm setting, equilibrium capacities are shown to be larger if both firms maximise total profits than if they maximise profits per cab.

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