Governments often delegate aspects of regulatory enforcement to third-party firms that sell compliance-related services to regulated buyers. Competition in the resulting compliance markets may generate social costs and benefits. Does competition lead to lower prices and better choices for buyers? Does it induce sellers to help buyers evade regulations? This paper illustrates how the answers to these questions can improve regulation of markets for passenger vehicle emissions tests. Test-level data from Texas between 2002 and 2024 shows that thousands of testing firms facilitated more than 1 million cases of cheating by customers. Quasi-random increases in local and market-level competition cause more cheating, which allows drivers to avoid repairs that would decrease their vehicles' emissions of criteria air pollutants. In ongoing work, I estimate a dynamic discrete choice model of demand for cheating and fair tests among differentiated stations, as well as for repairs. This model quantifies the benefit of restricting competition in terms of reduced pollution, and weighs it against the costs in terms of changes in test prices and driving distances between consumers and firms.

Dockless, shared e-bikes and scooters are a rapidly-growing segment of the local transportation market despite being taxed at higher rates per mile of travel than many conventional transportation modes, including motor vehicles. This paper asks what the optimal tax rate for shared bikes and scooters would be when accounting for environmental externalities and redistribution. We derive a sufficient-statistics model that describes how optimal tax rates depend on both extensive-margin (number of trips) and intensive-margin (duration of trips) demand responses to price changes, as well as the income of bike and scooter users and net externalities relative to other travel modes. We estimate the parameters of this model using trip-level data from Lime, a large bike and scooter company, and find that in several U.S. cities, use of their vehicles is concentrated among low-income individuals. The model accordingly suggests that policymakers in these cities might want to subsidize shared bike and scooter use substantially more than what can be justified by the  modest positive externalities it generates by displacing trips by motor vehicles.