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Good Modelling of Bad Outputs: Pollution and Multiple-Output Production

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  • Førsund, Finn R.

    ()
    (Dept. of Economics, University of Oslo)

Abstract

The materials balance principle points to the crucial role of material inputs in generating residuals in production processes. Pollution modelling must be of a multi-output nature. The most flexible transformation function in outputs and inputs used in textbooks is too general to make sense in pollution modelling. Specifying bads as if they are inputs, although may be defendable on a macro level as a reduced form, hides explicit considerations of various modification activities. Extending the non-parametric efficiency approach to cover bads as outputs, assuming weak disposability of the bads as the only change in the modelling of the technology, has serious weaknesses. A complete taxonomy of inputs as to the impact on both residuals and marketed products as joint outputs is derived, based on factorially determined multi-output production, thus providing information for choice of policy instruments.

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Bibliographic Info

Paper provided by Oslo University, Department of Economics in its series Memorandum with number 30/2008.

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Length: 41 pages
Date of creation: 01 Dec 2008
Date of revision:
Publication status: Published as Førsund, Finn R., 'Good Modelling of Bad Outputs: Pollution and Multiple-Output Production' in International Review of Environmental and Resource Economics, 2009, pages 1-38.
Handle: RePEc:hhs:osloec:2008_030

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Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
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Web page: http://www.oekonomi.uio.no/indexe.html
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Keywords: Multiple-output production; pollution; bads; purification; DEA;

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References

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Citations

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Cited by:
  1. Serra, Teresa & Chambers, Robert G. & Oude Lansink, Alfons, 2014. "Measuring technical and environmental efficiency in a state-contingent technology," European Journal of Operational Research, Elsevier, vol. 236(2), pages 706-717.
  2. Yang, Fuxia & Yang, Mian & Nie, Hualin, 2013. "Productivity trends of Chinese regions: A perspective from energy saving and environmental regulations," Applied Energy, Elsevier, vol. 110(C), pages 82-89.
  3. Roberto Gómez-Calvet & David Conesa & Ana Rosa Gómez-Calvet & Emili Tortosa-Ausina, 2013. "Energy efficiency in the European Union: What can be learned from the joint application of directional distance functions and slacks-based measures?," Working Papers 2013/17, Economics Department, Universitat Jaume I, Castellón (Spain).
  4. Kuosmanen, Natalia & Kuosmanen, Timo, 2013. "Modeling Cumulative Effects of Nutrient Surpluses in Agriculture: A Dynamic Approach to Material Balance Accounting," Ecological Economics, Elsevier, vol. 90(C), pages 159-167.
  5. Rødseth, Kenneth Løvold, 2013. "Capturing the least costly way of reducing pollution: A shadow price approach," Ecological Economics, Elsevier, vol. 92(C), pages 16-24.
  6. Mikuláš Luptáèik & Bernhard Mahlberg, 2013. "Eco-Efficiency and Eco-Productivity change over time in a multisectoral economic system," Department of Economic Policy Working Paper Series 004, Department of Economic Policy, Faculty of National Economy, University of Economics in Bratislava.
  7. Leleu, Hervé, 2013. "Shadow pricing of undesirable outputs in nonparametric analysis," European Journal of Operational Research, Elsevier, vol. 231(2), pages 474-480.

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