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Economic inefficiency and environmental impact: An application to aquaculture production

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  • Asche, Frank
  • Roll, Kristin H.
  • Tveteras, Ragnar

Abstract

In industries characterized by frequent innovation and high productivity growth, substantial variation in produced quantity and input use may occur, leading to increased costs. An effect that has received little attention is that inefficiency can exacerbate environmental impacts. This effect is particularly important if environmentally damaging inputs are overused. In addition to increasing firms' costs, such inefficiency can also increase the environmental impact of the firm's activity. This makes the degree of inefficiency in an industry an issue for environmental regulators. In this paper, we estimate technical and allocative efficiency for a sample of Norwegian salmon farmers. Our results show that both technical and allocative inefficiency on average are significant in explaining the level and variation in farm costs, and that the main environmental impact due to inefficiency from the Norwegian salmon aquaculture industry has its origin in technical inefficiency.

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  • Asche, Frank & Roll, Kristin H. & Tveteras, Ragnar, 2009. "Economic inefficiency and environmental impact: An application to aquaculture production," Journal of Environmental Economics and Management, Elsevier, vol. 58(1), pages 93-105, July.
    • Handle: RePEc:eee:jeeman:v:58:y:2009:i:1:p:93-105
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    2. Hukom, Venticia & Nielsen, Rasmus & Asmild, Mette & Nielsen, Max, 2020. "Do Aquaculture Farmers Have an Incentive to Maintain Good Water Quality? The Case of Small-Scale Shrimp Farming in Indonesia," Ecological Economics, Elsevier, vol. 176(C).
    3. Gregg, Daniel & Rolfe, John, 2016. "The value of environment across efficiency quantiles: A conditional regression quantiles analysis of rangelands beef production in north Eastern Australia," Ecological Economics, Elsevier, vol. 128(C), pages 44-54.
    4. Misund, Bård, 2015. "Financial Ratios and Prediction on Corporate Bankruptcy in the Atlantic Salmon Industry," UiS Working Papers in Economics and Finance 2015/9, University of Stavanger.
    5. Nielsen, Rasmus, 2012. "Introducing individual transferable quotas on nitrogen in Danish fresh water aquaculture: Production and profitability gains," Ecological Economics, Elsevier, vol. 75(C), pages 83-90.
    6. Frank Asche & Hans‐Martin Straume & Erling Vårdal, 2021. "Perish or prosper: Trade patterns for highly perishable seafood products," Agribusiness, John Wiley & Sons, Ltd., vol. 37(4), pages 876-890, October.
    7. Rangan Gupta & Zinnia Mukherjee & Mike G. Tsionas & Peter Wanke, 2016. "Productive Efficiency of Connecticut Long Island Lobster Fishery Using a Finite Mixture Model," Working Papers 201614, University of Pretoria, Department of Economics.
    8. Kristin Roll, 2013. "Measuring performance, development and growth when restricting flexibility," Journal of Productivity Analysis, Springer, vol. 39(1), pages 15-25, February.
    9. Asche, Frank & Misund, Bard & Oglend, Atle, 2015. "The Spot-Forward Relationship in the Atlantic Salmon Market," UiS Working Papers in Economics and Finance 2015/16, University of Stavanger.
    10. Asche, Frank & Oglend, Atle, 2016. "The relationship between input-factor and output prices in commodity industries: The case of Norwegian salmon aquaculture," Journal of Commodity Markets, Elsevier, vol. 1(1), pages 35-47.
    11. Frank Asche & Kristin H. Roll & Ragnar Tveteras, 2016. "Profiting from Agglomeration? Evidence from the Salmon Aquaculture Industry," Regional Studies, Taylor & Francis Journals, vol. 50(10), pages 1742-1754, October.
    12. Vårdal, Erling & Asche, Frank & Straume, Hans-Martin, 2017. "Perish or prosper: Trade patterns for highly perishable products," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261278, European Association of Agricultural Economists.
    13. Frank Jensen & Rasmus Nielsen & Henrik Meilby, 2023. "Regulation of aquaculture production," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 25(2), pages 161-204, April.
    14. Rasmus Nielsen & Jesper Levring Andersen & Peter Bogetoft, 2014. "Dynamic Reallocation of Marketable Nitrogen Emission Permits in Danish Freshwater Aquaculture," Marine Resource Economics, University of Chicago Press, vol. 29(3), pages 219-239.
    15. Straume, Hans-Martin, 2015. "Trade costs and Norwegian salmon export," Working Papers in Economics 06/15, University of Bergen, Department of Economics.
    16. Wei Yan & Changbiao Zhong, 2022. "The Coordination of Aquaculture Development with Environment and Resources: Based on Measurement of Provincial Eco-Efficiency in China," IJERPH, MDPI, vol. 19(13), pages 1-13, June.
    17. César Salazar & Roberto Cárdenas-Retamal & Marcela Jaime, 2023. "Environmental efficiency in the salmon industry—an exploratory analysis around the 2007 ISA virus outbreak and subsequent regulations in Chile," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(8), pages 8107-8135, August.
    18. Fabien Martinez, 2015. "A Three-Dimensional Conceptual Framework of Corporate Water Responsibility," Post-Print hal-02887624, HAL.
    19. Ali, Sarah & McCann, Laura M.J. & Allspach, Jessica, 2012. "Manure Transfers in the Midwest and Factors Affecting Adoption of Manure Testing," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(4), pages 1-16, November.
    20. Straume, Hans-Martin & Asche, Frank, 2015. "Duration and temporary trade," Working Papers in Economics 04/15, University of Bergen, Department of Economics.
    21. Gergő Gyalog & Judit Oláh & Emese Békefi & Mónika Lukácsik & József Popp, 2017. "Constraining Factors in Hungarian Carp Farming: An Econometric Perspective," Sustainability, MDPI, vol. 9(11), pages 1-13, November.
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    23. Poulomi Bhattacharya & K. N. Ninan, 2011. "Social cost‐benefit analysis of intensive versus traditional shrimp farming: A case study from India," Natural Resources Forum, Blackwell Publishing, vol. 35(4), pages 321-333, November.

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