Speaker: Hayeon Jeong

Title: Does Greater Policy Intensity Improve Policy Effectiveness? Evidence from Seoul, South Korea

Abstract: While stricter policies may enhance compliance, they may also encourage behaviors that offset intended benefits. I exploit the gradual intensification of Seoul's vehicle control policy — an increasingly common policy instrument shaping pollution exposures in cities globally. I model individual decisions to comply, exploit loopholes, or violate the policy outright, and assess how these responses vary with policy stringency. I find loophole-exploiting behaviors​ — taking detours or driving outside regulated hours (before 6 a.m. or after 9 p.m.)​ —increased with policy "ratcheting". Across multiple ratcheting events, the most stringent phase led to a 19% rise in loophole exploitation, the next to 13%, and the least stringent to a 7% increase. These results support the theoretical prediction that higher policy intensity can induce greater loophole exploitation. The findings are robust across alternative measures of loophole behavior and reveal a deterioration in air quality (PM10, PM2.5) during non-crackdown hours. The resulting health costs ​likely exceeded the gains from reduced pollution during crackdown hours, underscoring the potential unintended consequences of intensified regulation.