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Efficiency and environmental regulation: a "complex situation"

Author

Listed:
  • Andrés J. Picazo-Tadeo

    (Departamento de Economía Aplicada II, Universitat de Valencia)

  • Diego Prior

    (Departament d'Economia de l'Empresa, Universitat Autonoma de Barcelona)

Abstract

Production of desirable outputs is often accompanied by undesirable by-products that have damaging effects on the environment, and whose disposal is frequently regulated by public authorities. In this paper, we compute directional technology distance functions under particular assumptions concerning disposability of bads in order to test for the existence of what we call ‘complex situations’, where the biggest producer is not the greatest polluter. Furthermore, we show that how in such situations, environmental regulation could achieve an effective reduction in the aggregate level of bad outputs without reducing the production of good outputs. Finally, we illustrate our methodology with an empirical application to a sample of Spanish tile ceramic producers.

Suggested Citation

  • Andrés J. Picazo-Tadeo & Diego Prior, 2005. "Efficiency and environmental regulation: a "complex situation"," Working Papers 200502, Departament Empresa, Universitat Autònoma de Barcelona.
    • Handle: RePEc:bbe:wpaper:200502
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    File URL: http://selene.uab.es/dep-economia-empresa/documents/05-2.pdf
    File Function: First version, 2005
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    Citations

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    Cited by:

    1. Davutyan, Nurhan & Bilsel, Murat & Tarcan, Menderes, 2015. "Migration, Risk-Adjusted Mortality, Varieties of Congestion and Patient Satisfaction in Turkish Provincial General Hospitals," Data Envelopment Analysis Journal, now publishers, vol. 1(2), pages 135-169, July.
    2. Davutyan, Nurhan & Bilsel, Murat & Tarcan, Menderes, 2012. "Risk-Adjusted Mortality, varieties of congestion and patient satisfaction in Turkish provincial general hospitals," MPRA Paper 37437, University Library of Munich, Germany.

    More about this item

    Keywords

    environmental regulation; efficiency; disposability of bads;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L68 - Industrial Organization - - Industry Studies: Manufacturing - - - Appliances; Furniture; Other Consumer Durables

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