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The Diffusion of Biological Waste-Water Treatment Plants in the Dutch Food and Beverage Industry

  • René Kemp


This article develops an economic model of environmental technology adoption decisions. The model is applied econometrically to the diffusion of biological waste-water treatment plants in the Dutch food and beverage industry. It shows that it is possible to explain the overall diffusion pattern of biological waste-water treatment plants in terms of a rational choice model in which prospective adopters trade off the costs of effluent treatment against the savings on effluent tax payments. Effluent charges are shown to be a significant positive factor in the timing of adoption of biological effluent treatment plants. This result is brought out by both the rational choice and the epidemic models. None of the models however can explain year-to-year changes in the ownership of biological waste-water treatment plants during the 1974–91 period, which suggests that there are other factors, not included in the model, that affect the timing of adoption. Copyright Kluwer Academic Publishers 1998

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Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 12 (1998)
Issue (Month): 1 (July)
Pages: 113-136

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Handle: RePEc:kap:enreec:v:12:y:1998:i:1:p:113-136
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  1. Avinash Dixit, 1992. "Investment and Hysteresis," Journal of Economic Perspectives, American Economic Association, vol. 6(1), pages 107-132, Winter.
  2. Hans Th. A. Bressers, 1988. "A Comparison Of The Effectiveness Of Incentives And Directives: The Case Of Dutch Water Quality Policy," Review of Policy Research, Policy Studies Organization, vol. 7(3), pages 500-518, 03.
  3. Pindyck, Robert, 1989. "Irreversibility, uncertainty, and investment," Policy Research Working Paper Series 294, The World Bank.
  4. Jaffe Adam B. & Stavins Robert N., 1995. "Dynamic Incentives of Environmental Regulations: The Effects of Alternative Policy Instruments on Technology Diffusion," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages S43-S63, November.
  5. René Kemp & Xander Olsthoorn & Frans Oosterhuis & Harmen Verbruggen, 1992. "Supply and demand factors of Cleaner technologies: Some empirical evidence," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 2(6), pages 615-634, November.
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