Weak Disposability in Nonparametric Production Analysis with Undesirable Outputs
Weak disposability of outputs means that firms can abate harmful emissions by decreasing the activity level. Modeling weak disposability in nonparametric production analysis has caused some confusion. This article identifies a dilemma in these approaches: conventional formulations implicitly and unintentionally assume all firms apply uniform abatement factors. However, it is usually cost-effective to abate emissions in those firms where the marginal abatement costs are lowest. This article presents a simple formulation of weak disposability that allows for non-uniform abatement factors and preserves the linear structure of the model. Copyright 2005 American Agricultural Economics Association.
Year of publication: |
2005
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Authors: | Kuosmanen, Timo |
Published in: |
American Journal of Agricultural Economics. - American Agricultural Economics Association. - Vol. 87.2005, 4, p. 1077-1082
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Publisher: |
American Agricultural Economics Association |
Saved in:
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