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Input Substitution and Pollution Control Under Uncertainty and Firm Heterogeneity


  • Wu, Junjie


Much research has focused on emission-based instruments for pollution control, but indirect approaches that control input use or production technologies are often used. This article derives a simple rule for evaluating the relative efficiency of input-use taxes and standards in the presence of input substitution, firm heterogeneity, and uncertainty. The importance of input substitution is demonstrated and the key parameters that determine the relative efficiency are identified. Copyright 2000 by Blackwell Publishing Inc.

Suggested Citation

  • Wu, Junjie, 2000. " Input Substitution and Pollution Control Under Uncertainty and Firm Heterogeneity," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 2(2), pages 273-288.
  • Handle: RePEc:bla:jpbect:v:2:y:2000:i:2:p:273-88

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    References listed on IDEAS

    1. B. Douglas Bernheim & Michael D. Whinston, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 101(1), pages 1-31.
    2. repec:cup:apsrev:v:82:y:1988:i:02:p:405-422_08 is not listed on IDEAS
    3. Austen-Smith, David & Banks, Jeffrey, 1988. "Elections, Coalitions, and Legislative Outcomes," American Political Science Review, Cambridge University Press, vol. 82(02), pages 405-422, June.
    4. Langbein, Laura I, 1993. "PACs, Lobbies and Political Conflict: The Case of Gun Control," Public Choice, Springer, vol. 77(3), pages 551-572, November.
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    Cited by:

    1. Tang, Erzi & Liu, Fengchao & Zhang, Jingjing & Yu, Jiao, 2014. "A model to analyze the environmental policy of resource reallocation and pollution control based on firms' heterogeneity," Resources Policy, Elsevier, vol. 39(C), pages 88-91.
    2. Bernardo Moreno & Jose L. Torres, 2007. "Output Subsidies and Quotas under Uncertainty and Firm Heterogeneity," International Journal of Business and Economics, College of Business and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 6(2), pages 147-160, August.

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