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Direct And Indirect Shadow Price And Cost Estimates Of Nitrogen Pollution Abatement

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  • Shaik, Saleem
  • Helmers, Glenn A.
  • Langemeier, Michael R.

Abstract

The implications of treating environmental pollution as an undesirable output (weak disposability) as well as a normal input (strong disposability) on the direct and indirect shadow price and cost estimates of nitrogen pollution abatement is analyzed using Nebraska agriculture sector data. The shadow price of nitrogen pollution abatement treated as an undesirable output represents the reduced revenue from reducing nitrogen pollution. In contrast, the shadow price of nitrogen pollution abatement treated as an input reflects the increased cost of reducing nitrogen pollution. For the 1936-97 period, the estimated shadow price and cost of nitrogen pollution abatement for Nebraska ranges from $0.91 to $2.21 per pound and from $300 to $729 million respectively.

Suggested Citation

  • Shaik, Saleem & Helmers, Glenn A. & Langemeier, Michael R., 2002. "Direct And Indirect Shadow Price And Cost Estimates Of Nitrogen Pollution Abatement," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(2), pages 1-13, December.
    • Handle: RePEc:ags:jlaare:31121
    DOI: 10.22004/ag.econ.31121
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    3. Adenuga, A. & Davis, J. & Hutchinson, G. & Donnellan, T. & Patton, M., 2018. "Valuing Agricultural Externalities: Nitrogen Surplus in the Dairy Sector on the Island of Ireland," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277434, International Association of Agricultural Economists.
    4. Welch, Eric & Barnum, Darold, 2009. "Joint environmental and cost efficiency analysis of electricity generation," Ecological Economics, Elsevier, vol. 68(8-9), pages 2336-2343, June.
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    6. Khataza, Robertson R. B. & Hailu, Atakelty & Kragt, Marit E. & Doole, Graeme J., 2017. "Estimating shadow price for symbiotic nitrogen and technical efficiency for legume-based conservation agriculture in Malawi," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 61(3), July.
    7. Wang, Xinbin & Wang, Zilong & Wang, Rong, 2023. "Does green economy contribute towards COP26 ambitions? Exploring the influence of natural resource endowment and technological innovation on the growth efficiency of China's regional green economy," Resources Policy, Elsevier, vol. 80(C).
    8. K Hervé Dakpo & Philippe Jeanneaux & Laure Latruffe, 2014. "Inclusion of undesirable outputs in production technology modeling:The case of greenhouse gas emissions in French meat sheep farming," Working Papers SMART 14-08, INRAE UMR SMART.
    9. C. Caldeira & L. Dias & F. Freire & D. Kremmydas & S. Rozakis, 2014. "Allocating shadow prices in a multiobjective chance constrained model for biodiesel blending," Working Papers 2014-7, Agricultural University of Athens, Department Of Agricultural Economics.
    10. Parisa Aghajanzadeh-Darzi & Pierre-Alain Jayet & Athanasios Petsakos, 2017. "Improvement of a Bio-Economic Mathematical Programming Model in the Case of On-Farm Source Inputs and Outputs," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 15(3), pages 489-508, September.
    11. K. Hervé Dakpo & Yann Desjeux & Laure Latruffe, 2023. "Cost of abating excess nitrogen on wheat plots in France: An assessment with multi‐technology modelling," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(3), pages 800-815, September.
    12. Adewale Henry Adenuga & John Davis & George Hutchinson & Trevor Donnellan & Myles Patton, 2019. "Environmental Efficiency and Pollution Costs of Nitrogen Surplus in Dairy Farms: A Parametric Hyperbolic Technology Distance Function Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(3), pages 1273-1298, November.
    13. Charles, Vincent & Kumar, Mukesh & Irene Kavitha, S., 2012. "Measuring the efficiency of assembled printed circuit boards with undesirable outputs using data envelopment analysis," International Journal of Production Economics, Elsevier, vol. 136(1), pages 194-206.
    14. Theodoros Skevas & Teresa Serra, 2017. "Derivation of netput shadow prices under different levels of pest pressure," Journal of Productivity Analysis, Springer, vol. 48(1), pages 25-34, August.
    15. Lauwers, Ludwig, 2009. "Justifying the incorporation of the materials balance principle into frontier-based eco-efficiency models," Ecological Economics, Elsevier, vol. 68(6), pages 1605-1614, April.
    16. Rezek, Jon P. & Perrin, Richard K., 2004. "Environmentally Adjusted Agricultural Productivity in the Great Plains," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(2), pages 1-24, August.
    17. Khataza, Robertson R.B. & Hailu, Atakelty & Kragt, Marit E. & Doole, Graeme, 2017. "The opportunity costs of enhancing legume‐based sustainable agricultural intensification practices in Malawi," 2017 Conference (61st), February 7-10, 2017, Brisbane, Australia 258672, Australian Agricultural and Resource Economics Society.
    18. Chuku, Chuku, 2015. "Incorporating Environmental Externalities in Total Factor Productivity Analysis: The Case of Soil Erosion in Nigerian Agriculture," MPRA Paper 68165, University Library of Munich, Germany.
    19. Alfons Oude Lansink & Alan Wall, 2014. "Frontier models for evaluating environmental efficiency: an overview," Economics and Business Letters, Oviedo University Press, vol. 3(1), pages 43-50.

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