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Environmental production functions and environmental directional distance functions

  • Färe, Rolf
  • Grosskopf, Shawna
  • Pasurka, Carl A.

This study derives the relationship between environmental production functions and environmental directional distance functions. These two approaches make different assumptions when modeling the joint production of good and bad outputs. The environmental production function credits a producer solely for expanding good output production, while the directional environmental distance function credits a producer for simultaneously increasing production of the good output and reducing production of bad outputs. Estimates of technical efficiency and pollution abatement costs are calculated using data from coal-fired power plants. These results provide the empirical basis for comparing the environmental production function to the environmental directional distance function.

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Article provided by Elsevier in its journal Energy.

Volume (Year): 32 (2007)
Issue (Month): 7 ()
Pages: 1055-1066

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Handle: RePEc:eee:energy:v:32:y:2007:i:7:p:1055-1066
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  1. Fare, R. & Grosskopf, S. & Pasurka, C., 1986. "Effects on relative efficiency in electric power generation due to environmental controls," Resources and Energy, Elsevier, vol. 8(2), pages 167-184, June.
  2. Carl Pasurka, 2001. "Technical Change and Measuring Pollution Abatement Costs: An Activity Analysis Framework," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 18(1), pages 61-85, January.
  3. Rolf Färe & Shawna Grosskopf & Carl A Pasurka, Jr., 2001. "Accounting for Air Pollution Emissions in Measures of State Manufacturing Productivity Growth," Journal of Regional Science, Wiley Blackwell, vol. 41(3), pages 381-409.
  4. Yaisawarng, Suthathip & Klein, J Douglass, 1994. "The Effects of Sulfur Dioxide Controls on Productivity Change in the U.S. Electric Power Industry," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 447-60, August.
  5. Burtraw, Dallas & Palmer, Karen & Cropper, Maureen & Carlson, Curtis, 1998. "Sulfur-Dioxide Control By Electric Utilities: What Are the Gains from Trade?," Discussion Papers dp-98-44-rev, Resources For the Future.
  6. Fare, Rolf & Grosskopf, Shawna, 1983. "Measuring output efficiency," European Journal of Operational Research, Elsevier, vol. 13(2), pages 173-179, June.
  7. Boyd, Gale A. & McClelland, John D., 1999. "The Impact of Environmental Constraints on Productivity Improvement in Integrated Paper Plants," Journal of Environmental Economics and Management, Elsevier, vol. 38(2), pages 121-142, September.
  8. Aiken, Deborah Vaughn & Pasurka, Carl Jr., 2003. "Adjusting the measurement of US manufacturing productivity for air pollution emissions control," Resource and Energy Economics, Elsevier, vol. 25(4), pages 329-351, October.
  9. Christainsen, G.B. & Tietenberg, T.H., 1985. "Distributional and macroeconomic aspects of environmental policy," Handbook of Natural Resource and Energy Economics, in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 1, chapter 9, pages 345-393 Elsevier.
  10. Michael E. Porter & Claas van der Linde, 1995. "Toward a New Conception of the Environment-Competitiveness Relationship," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 97-118, Fall.
  11. Fare, Rolf, et al, 1989. "Multilateral Productivity Comparisons When Some Outputs Are Undesirable: A Nonparametric Approach," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 90-98, February.
  12. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June.
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