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Weak Disposability in Nonparametric Production Analysis with Undesirable Outputs

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In this paper, the authors present a simple formulation of weak disposability that allows for non-uniform abatement factors and preserves the linear structure of the model and identify a dilemma in these approaches.
Abstract
Environmental Economics and Natural Resources Group at Wageningen University in The Netherlands 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.

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Citations
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Journal ArticleDOI

Energy and CO2 emission performance in electricity generation: A non-radial directional distance function approach

TL;DR: It is found that OECD countries have better carbon emission performance and integrated energy-carbon performance than non-OECD countries in electricity generation, while the difference in energy performance is not significant.
Journal ArticleDOI

A global Malmquist-Luenberger productivity index

TL;DR: In this paper, an alternative environmentally sensitive productivity growth index, which is circular and free from the infeasibility problem, is proposed. But it can also be decomposed into sources of productivity growth, and the suggested index is employed in analyzing 26 OECD countries for the period 1990-2003.
Journal ArticleDOI

Assessing eco-efficiency with directional distance functions

TL;DR: This paper proposes the use of directional distance functions and Data Envelopment Analysis techniques to assess eco-efficiency and shows how these functions can be used to compute a wide range of indicators representing different objectives regarding economic and ecological performance.
Journal ArticleDOI

Modelling pollution-generating technologies in performance benchmarking: Recent developments, limits and future prospects in the nonparametric framework

TL;DR: The classic modelling approach relying on the weak disposability assumption is described, and the major recent developments around the inclusion of undesirable outputs in production technology modelling are explained.
References
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Book

Theory of cost and production functions

TL;DR: In this article, a unified treatment of cost and production functions underlie the economic theory of production is presented, and the duality between cost function and production function is developed by introducing a cost correspondence, showing that these two functions are given in terms of each other by dual minimum problems.
Book

Multi-Output Production and Duality: Theory and Applications

Rolf Färe, +1 more
TL;DR: Theories of the Firm through duality as mentioned in this paper have been used in many applications, e.g. towards empirical applications, such as profit functions, cost functions, distance functions, and profit functions.
Journal ArticleDOI

Non-parametric Productivity Analysis with Undesirable Outputs: An Application to the Canadian Pulp and Paper Industry

TL;DR: In this paper, the authors extend the Chavas-Cox approach to non-parametric analysis by incorporating undesirable outputs to provide a more complete representation of the production technology, and construct inner and outer nonparametric technology bounds.
Book

New directions : efficiency and productivity

TL;DR: Efficiency Indicators And Indexes as mentioned in this paper : The Nerlovian Profit Indicator, the revenue efficiency indicator, the cost efficiency indicator and the efficiency index are the main indicators of efficiency.
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