Efficiency and environmental regulation: a "complex situation"
AbstractProduction of desirable outputs is often accompanied by undesirable by-products that have damaging effects on the environment, and whose disposal is frequently regulated by public authorities. In this paper, we compute directional technology distance functions under particular assumptions concerning disposability of bads in order to test for the existence of what we call ‘complex situations’, where the biggest producer is not the greatest polluter. Furthermore, we show that how in such situations, environmental regulation could achieve an effective reduction in the aggregate level of bad outputs without reducing the production of good outputs. Finally, we illustrate our methodology with an empirical application to a sample of Spanish tile ceramic producers.
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Bibliographic InfoPaper provided by Department of Business Economics, Universitat Autonoma de Barcelona in its series Working Paper with number 200502.
Date of creation: Apr 2005
Date of revision:
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environmental regulation; efficiency; disposability of bads;
Find related papers by JEL classification:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- L68 - Industrial Organization - - Industry Studies: Manufacturing - - - Appliances; Other Consumer Durables
This paper has been announced in the following NEP Reports:
- NEP-AGR-2006-11-18 (Agricultural Economics)
- NEP-ALL-2006-11-18 (All new papers)
- NEP-EFF-2006-11-18 (Efficiency & Productivity)
- NEP-ENV-2006-11-18 (Environmental Economics)
- NEP-REG-2006-11-18 (Regulation)
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- Førsund, Finn R., 2008. "Good Modelling of Bad Outputs: Pollution and Multiple-Output Production," Memorandum 30/2008, Oslo University, Department of Economics.
- Davutyan, Nurhan & Bilsel, Murat & Tarcan, Menderes, 2012. "Risk-Adjusted Mortality, varieties of congestion and patient satisfaction in Turkish provincial general hospitals," MPRA Paper 37437, University Library of Munich, Germany.
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