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The Estimation of a Polluting By-Production Technology Using Statistical Copulas

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  • Alexandre Repkine

    (College of Social Sciences)

Abstract

We estimate the parameters of a two-equation by-production technology defined as an intersection of two sub-technologies producing one good, and two polluting outputs using a sample of 130 countries for the period between 2000 and 2011. We use Frank, Farlie-Gumbel-Morgenstern, and Ali-Mikhail-Haq copulas in order to account for stochastic dependence between technical inefficiency components of the composite error terms characterizing the two sub-technologies. Our empirical results suggest a positive stochastic association between the technical inefficiency of producing a good output, or GDP, and that of producing carbon dioxide and methane. Introducing copulas results in significant changes in the values of the estimated parameters of the by-production technology.

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  • 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.
    • Handle: RePEc:kap:jproda:v:60:y:2023:i:1:d:10.1007_s11123-023-00672-5
    DOI: 10.1007/s11123-023-00672-5
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