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Shadow prices of environmental outputs and production efficiency of household-level paper recycling units in Vietnam

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  • Van Ha, Nguyen
  • Kant, Shashi
  • Maclaren, Virginia

Abstract

The production efficiency and shadow prices of three environmental outputs (BOD, COD, and SS) of 63 household-level paper-recycling units, from a recycling craft village in Vietnam, are assessed A two-stage procedure, linear programming and stochastic estimation, is used to estimate output distance function. Social capital as a production factor and environmental outputs are included in the output distance function. Results indicate that production efficiencies could potentially be improved by 28%. There is a substantial variation in the shadow prices of environmental outputs among the production units of different types of paper products. Furthermore, the average shadow prices of the three environmental outputs are all positive. This indicates a potential for improving environmental quality though introducing pollution-prevention methods to paper-recycling production processes in Vietnam (e.g., recirculation of wastewater), and suggests that it may be inappropriate to restrict the shadow prices of environmental outputs to be non-positive for the analysis of some production processes.

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  • Van Ha, Nguyen & Kant, Shashi & Maclaren, Virginia, 2008. "Shadow prices of environmental outputs and production efficiency of household-level paper recycling units in Vietnam," Ecological Economics, Elsevier, vol. 65(1), pages 98-110, March.
    • Handle: RePEc:eee:ecolec:v:65:y:2008:i:1:p:98-110
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    4. Wei, Chu & Löschel, Andreas & Liu, Bing, 2013. "An empirical analysis of the CO2 shadow price in Chinese thermal power enterprises," Energy Economics, Elsevier, vol. 40(C), pages 22-31.
    5. Asha Gunawardena, 2016. "Cost of Controlling Water Pollution and its Impact on Industrial Efficiency," Working Papers id:11537, eSocialSciences.
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    10. Serra, Teresa & Poli, Elena, 2015. "Shadow prices of social capital in rural India, a nonparametric approach," European Journal of Operational Research, Elsevier, vol. 240(3), pages 892-903.
    11. Ning Geng & Xiaoqing Zheng & Xibing Han & Xiaonan Li, 2024. "Towards Sustainable Development: The Impact of Agricultural Productive Services on China’s Low-Carbon Agricultural Transformation," Agriculture, MDPI, vol. 14(7), pages 1-25, June.
    12. Zhou, P. & Zhou, X. & Fan, L.W., 2014. "On estimating shadow prices of undesirable outputs with efficiency models: A literature review," Applied Energy, Elsevier, vol. 130(C), pages 799-806.
    13. Letmathe, Peter & Wagner, Sandra, 2018. "“Messy” marginal costs: Internal pricing of environmental aspects on the firm level," International Journal of Production Economics, Elsevier, vol. 201(C), pages 41-52.
    14. Wei, Chu & Ni, Jinlan & Du, Limin, 2012. "Regional allocation of carbon dioxide abatement in China," China Economic Review, Elsevier, vol. 23(3), pages 552-565.
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