IDEAS home Printed from https://ideas.repec.org/a/eee/jeeman/v58y2009i1p93-105.html
   My bibliography  Save this article

Economic inefficiency and environmental impact: An application to aquaculture production

Author

Listed:
  • Asche, Frank
  • Roll, Kristin H.
  • Tveteras, Ragnar

Abstract

In industries characterized by frequent innovation and high productivity growth, substantial variation in produced quantity and input use may occur, leading to increased costs. An effect that has received little attention is that inefficiency can exacerbate environmental impacts. This effect is particularly important if environmentally damaging inputs are overused. In addition to increasing firms' costs, such inefficiency can also increase the environmental impact of the firm's activity. This makes the degree of inefficiency in an industry an issue for environmental regulators. In this paper, we estimate technical and allocative efficiency for a sample of Norwegian salmon farmers. Our results show that both technical and allocative inefficiency on average are significant in explaining the level and variation in farm costs, and that the main environmental impact due to inefficiency from the Norwegian salmon aquaculture industry has its origin in technical inefficiency.

Suggested Citation

  • Asche, Frank & Roll, Kristin H. & Tveteras, Ragnar, 2009. "Economic inefficiency and environmental impact: An application to aquaculture production," Journal of Environmental Economics and Management, Elsevier, vol. 58(1), pages 93-105, July.
    • Handle: RePEc:eee:jeeman:v:58:y:2009:i:1:p:93-105
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0095-0696(09)00014-X
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ragnar Tveteras & George E. Battese, 2006. "Agglomeration Externalities, Productivity, And Technical Inefficiency," Journal of Regional Science, Wiley Blackwell, vol. 46(4), pages 605-625, October.
    2. Subal C. Kumbhakar, 2002. "Specification and Estimation of Production Risk, Risk Preferences and Technical Efficiency," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(1), pages 8-22.
    3. Atkinson, Scott E. & Primont, Daniel, 2002. "Stochastic estimation of firm technology, inefficiency, and productivity growth using shadow cost and distance functions," Journal of Econometrics, Elsevier, vol. 108(2), pages 203-225, June.
    4. Kumbhakar, Subal C. & Heshmati, Almas & Hjalmarsson, Lennart, 1997. "Temporal patterns of technical efficiency: Results from competing models," International Journal of Industrial Organization, Elsevier, vol. 15(5), pages 597-616, August.
    5. T. Bjørndal & K. G. Salvanes, 1995. "Gains From Deregulation? An Empirical Test For Efficiency Gains In The Norwegian Fish Farming Industry," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(1), pages 113-126, January.
    6. Kumbhakar, Subal C., 1997. "Modeling allocative inefficiency in a translog cost function and cost share equations: An exact relationship," Journal of Econometrics, Elsevier, vol. 76(1-2), pages 351-356.
    7. Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 185-200.
    8. Blackorby, Charles & Russell, R Robert, 1989. "Will the Real Elasticity of Substitution Please Stand Up? (A Comparison of the Allen/Uzawa and Morishima Elasticities)," American Economic Review, American Economic Association, vol. 79(4), pages 882-888, September.
    9. Atkinson, Scott E & Cornwell, Christopher, 1994. "Estimation of Output and Input Technical Efficiency Using a Flexible Form and Panel Data," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(1), pages 245-255, February.
    10. Kopp, Raymond J. & Diewert, W. Erwin, 1982. "The decomposition of frontier cost function deviations into measures of technical and allocative efficiency," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 319-331, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gergő Gyalog & Judit Oláh & Emese Békefi & Mónika Lukácsik & József Popp, 2017. "Constraining Factors in Hungarian Carp Farming: An Econometric Perspective," Sustainability, MDPI, vol. 9(11), pages 1-13, November.
    2. Hukom, Venticia & Nielsen, Rasmus & Asmild, Mette & Nielsen, Max, 2020. "Do Aquaculture Farmers Have an Incentive to Maintain Good Water Quality? The Case of Small-Scale Shrimp Farming in Indonesia," Ecological Economics, Elsevier, vol. 176(C).
    3. Nielsen, Rasmus, 2012. "Introducing individual transferable quotas on nitrogen in Danish fresh water aquaculture: Production and profitability gains," Ecological Economics, Elsevier, vol. 75(C), pages 83-90.
    4. Nygaard, Rune & Roll, Kristin H., 2024. "Cross-hedging wild salmon prices," Journal of Commodity Markets, Elsevier, vol. 33(C).
    5. Straume, Hans-Martin & Asche, Frank, 2015. "Duration and temporary trade," Working Papers in Economics 04/15, University of Bergen, Department of Economics.
    6. Poulomi Bhattacharya & K. N. Ninan, 2011. "Social cost‐benefit analysis of intensive versus traditional shrimp farming: A case study from India," Natural Resources Forum, Blackwell Publishing, vol. 35(4), pages 321-333, November.
    7. Gregg, Daniel & Rolfe, John, 2016. "The value of environment across efficiency quantiles: A conditional regression quantiles analysis of rangelands beef production in north Eastern Australia," Ecological Economics, Elsevier, vol. 128(C), pages 44-54.
    8. Asche, Frank & Oglend, Atle, 2016. "The relationship between input-factor and output prices in commodity industries: The case of Norwegian salmon aquaculture," Journal of Commodity Markets, Elsevier, vol. 1(1), pages 35-47.
    9. Straume, Hans-Martin, 2015. "Trade costs and Norwegian salmon export," Working Papers in Economics 06/15, University of Bergen, Department of Economics.
    10. Vårdal, Erling & Asche, Frank & Straume, Hans-Martin, 2017. "Perish or prosper: Trade patterns for highly perishable products," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261278, European Association of Agricultural Economists.
    11. Johannes Pasch & Harry W. Palm, 2021. "Economic Analysis and Improvement Opportunities of African Catfish ( Clarias gariepinus ) Aquaculture in Northern Germany," Sustainability, MDPI, vol. 13(24), pages 1-23, December.
    12. Misund, Bård, 2015. "Financial Ratios and Prediction on Corporate Bankruptcy in the Atlantic Salmon Industry," UiS Working Papers in Economics and Finance 2015/9, University of Stavanger.
    13. Rangan Gupta & Zinnia Mukherjee & Mike G. Tsionas & Peter Wanke, 2016. "Productive Efficiency of Connecticut Long Island Lobster Fishery Using a Finite Mixture Model," Working Papers 201614, University of Pretoria, Department of Economics.
    14. Asche, Frank & Misund, Bard & Oglend, Atle, 2015. "The Spot-Forward Relationship in the Atlantic Salmon Market," UiS Working Papers in Economics and Finance 2015/16, University of Stavanger.
    15. Frank Jensen & Rasmus Nielsen & Henrik Meilby, 2023. "Regulation of aquaculture production," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 25(2), pages 161-204, April.
    16. César Salazar & Roberto Cárdenas-Retamal & Marcela Jaime, 2023. "Environmental efficiency in the salmon industry—an exploratory analysis around the 2007 ISA virus outbreak and subsequent regulations in Chile," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(8), pages 8107-8135, August.
    17. Alexandre Repkine, 2023. "The Estimation of a Polluting By-Production Technology Using Statistical Copulas," Journal of Productivity Analysis, Springer, vol. 60(1), pages 49-62, August.
    18. Kristin Roll, 2013. "Measuring performance, development and growth when restricting flexibility," Journal of Productivity Analysis, Springer, vol. 39(1), pages 15-25, February.
    19. Rasmus Nielsen & Jesper Levring Andersen & Peter Bogetoft, 2014. "Dynamic Reallocation of Marketable Nitrogen Emission Permits in Danish Freshwater Aquaculture," Marine Resource Economics, University of Chicago Press, vol. 29(3), pages 219-239.
    20. Fabien Martinez, 2015. "A Three-Dimensional Conceptual Framework of Corporate Water Responsibility," Post-Print hal-02887624, HAL.
    21. Frank Asche & Hans‐Martin Straume & Erling Vårdal, 2021. "Perish or prosper: Trade patterns for highly perishable seafood products," Agribusiness, John Wiley & Sons, Ltd., vol. 37(4), pages 876-890, October.
    22. Zhou, Xuming & Patel, Gupteswar & Mahalik, Mantu Kumar & Gozgor, Giray, 2024. "Effects of green energy and productivity on environmental sustainability in BRICS economies: The role of natural resources rents," Resources Policy, Elsevier, vol. 92(C).
    23. Frank Asche & Kristin H. Roll & Ragnar Tveteras, 2016. "Profiting from Agglomeration? Evidence from the Salmon Aquaculture Industry," Regional Studies, Taylor & Francis Journals, vol. 50(10), pages 1742-1754, October.
    24. Wei Yan & Changbiao Zhong, 2022. "The Coordination of Aquaculture Development with Environment and Resources: Based on Measurement of Provincial Eco-Efficiency in China," IJERPH, MDPI, vol. 19(13), pages 1-13, June.
    25. Ali, Sarah & McCann, Laura M.J. & Allspach, Jessica, 2012. "Manure Transfers in the Midwest and Factors Affecting Adoption of Manure Testing," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(4), pages 1-16, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kristin Roll, 2013. "Measuring performance, development and growth when restricting flexibility," Journal of Productivity Analysis, Springer, vol. 39(1), pages 15-25, February.
    2. Rungsuriyawiboon, Supawat & Zhang, Yanjie, 2018. "Examining the economic performance of Chinese farms: A dynamic efficiency and adjustment cost approach," Economic Analysis and Policy, Elsevier, vol. 57(C), pages 74-87.
    3. Pierani, Pierpaolo & Rizzi, Pier Luigi, 2003. "Technology and efficiency in a panel of Italian dairy farms: an SGM restricted cost function approach," Agricultural Economics, Blackwell, vol. 29(2), pages 195-209, October.
    4. Luis R. Murillo‐Zamorano, 2004. "Economic Efficiency and Frontier Techniques," Journal of Economic Surveys, Wiley Blackwell, vol. 18(1), pages 33-77, February.
    5. Osborne, Stefan & Trueblood, Michael A., 2001. "An Examination Of Economic Efficiency Of Russian Crop Output In The Reform Period," 2001 Annual meeting, August 5-8, Chicago, IL 20548, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Rodriguez-Alvarez, Ana & Fernandez-Blanco, Victor & Lovell, C. A. Knox, 2004. "Allocative inefficiency and its cost:: The case of Spanish public hospitals," International Journal of Production Economics, Elsevier, vol. 92(2), pages 99-111, November.
    7. Chaffai, Mohamed E., 1997. "Estimating input-specific technical inefficiency: The case of the Tunisian banking industry," European Journal of Operational Research, Elsevier, vol. 98(2), pages 314-331, April.
    8. Liu, Tung, 2021. "Measuring cost inefficiency: A dual approach," Economic Modelling, Elsevier, vol. 99(C).
    9. Atkinson, Scott E. & Dorfman, Jeffrey H., 2006. "Chasing Absolute Cost and Profit Savings in a World of Relative Inefficiency," 2006 Annual meeting, July 23-26, Long Beach, CA 21058, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Tung Liu, 2020. "Measuring Technical, Allocative inefficiency, and Cost Inefficiency by Applying Duality Theory," Working Papers 202001, Ball State University, Department of Economics, revised Jun 2020.
    11. Baños-Pino, José F. & Boto-García, David & Zapico, Emma, 2021. "Persistence and dynamics in the efficiency of toll motorways: The Spanish case," Efficiency Series Papers 2021/03, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    12. K. Ravirajan & K.R. Shanmugam, 2021. "Efficiency of commercial banks in India after global financial crises," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(3(628), A), pages 65-82, Autumn.
    13. Subal Kumbhakar & M. Denny & M. Fuss, 2000. "Estimation and decomposition of productivity change when production is not efficient: a paneldata approach," Econometric Reviews, Taylor & Francis Journals, vol. 19(4), pages 312-320.
    14. Mark Agee & Scott Atkinson & Thomas Crocker, 2012. "Child maturation, time-invariant, and time-varying inputs: their interaction in the production of child human capital," Journal of Productivity Analysis, Springer, vol. 38(1), pages 29-44, August.
    15. Tsionas, Mike G., 2016. "Parameters measuring bank risk and their estimation," European Journal of Operational Research, Elsevier, vol. 250(1), pages 291-304.
    16. Orea, Luis, 2019. "The Econometric Measurement of Firms’ Efficiency," Efficiency Series Papers 2019/02, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    17. Millan, Joaquin, 2004. "Scale and the Efficiency Production Function," Efficiency Series Papers 2004/02, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    18. Yongseung Han & Myeong Hwan Kim & Won-Joong Kim, 2012. "Determinants of profit efficiency: evidence from Korean savings banks," Applied Financial Economics, Taylor & Francis Journals, vol. 22(12), pages 1003-1016, June.
    19. Rodriguez-Alvarez, Ana & Tovar, Beatriz & Trujillo, Lourdes, 2007. "Firm and time varying technical and allocative efficiency: An application to port cargo handling firms," International Journal of Production Economics, Elsevier, vol. 109(1-2), pages 149-161, September.
    20. Stefanou, Spiro E., 2009. "A Dynamic Characterization of Efficiency," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 10(1), pages 1-16.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeeman:v:58:y:2009:i:1:p:93-105. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622870 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.