Behandling av uønskede biprodukter i produksjonsanalyse : ønskede modelleringsstrategier og anvendelser

The thesis consists of an introduction and four related papers. Their common topic is production analysis when undesirable outputs are accounted for. The introduction establishes the research platform on which the following papers are built by reviewing existing literature, proposing a new way of modeling environmentally regulated firms, and introducing some new areas of model application. The first article evaluates one of the most commonly applied axioms when some outputs are undesirable, namely weak disposability. The axiom is discussed in relation to the materials balance condition. It is shown that the two cannot hold simultaneously except when introducing abatement activities. Second, since abatement is not explicitly accounted for when applying the weak disposability axiom, the potential for reducing emissions may be overstated. This has important implications for efficiency measurement and estimation of marginal abatement costs. The second article builds on the conclusions from the first article by explicitly accounting for both the ways undesirable outputs are generated and how they may be reduced. Profit maximization under environmental regulation is evaluated and it is shown how regulations increase the costs of polluting inputs and lead to forgone profits. Consequently, allocative efficiency may be underestimated if regulatory constraints are not accounted for. Using U.S. electricity data, I find empirical support for this proposal. This is contrary to the established literature that has mainly focused on undesirable outputs’ influence on technical efficiency. The third article’s purpose is to extend an established method for abatement cost estimation to account for more flexible producer responses to environmental regulation than is currently being done. By applying the directional distance function, marginal abatement costs are derived that reflect the least cost way of reducing undesirable outputs. The fourth article develops one of the new areas of model application proposed in the introduction, namely evaluating how efforts directed at reducing some undesirable output may influence other undesirable outputs due to jointness. The emphasis is on how different strategies for reducing undesirable outputs influence the occurrence of reductions in secondary undesirable outputs

The Economics of Norwegian Salmon Farming: A Review of 30 years of Production Growth

Norwegian aquaculture emerged in the end of 1960 when new discoveries transformed production from trout farming to salmon farming. During recent decades farmed salmon has been one of the most successful aquaculture species in terms of production growth. Annual global production has increased from a few thousand tons in 1980 to about 1.65 million tons in 2006. Norway and Chile are today the main suppliers of farmed salmon. Several studies of Norwegian salmon farming have been published over the years, made possible by annual publications of micro data. In our study we characterize the growth in Norwegian salmon aquaculture through summarizing the findings of previous studies and by adding new information. Our purpose is two-folded: We will characterize previous development of the salmon industry and use this insight to assess prospects for future growth both in salmon farming and farming of new species. Our focus is technological change and cost structure i.e., elasticity of scale- and substitution and risk in production. We find a pattern where the industry have exploited most of its scale advantages and where production has become more feed intensive as possibilities of factor substitution has declined. This indicates that there has been an improvement of farming techniques, following from the fact that on-farm learning and R&D efforts has been tremendous in the past thirty years. The unique growth in the production of farmed salmon documents the importance of knowledge in production and sets a vantage ground for development of farming of new species

Market access and seaport efficiency: the case of container handling in Norway

Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/Comprehensive studies on the impact of market access on port efficiency are scarce, and the problem that market access indicators are potentially endogenous lacks treatment in maritime economics. This paper offers both theoretical and empirical advances to fill these research gaps. First, it pioneers in the use of Stochastic semi-Nonparametric Envelopment of Z variables Data for measuring port efficiency, and further develops the methodology for panel data and proposes an instrumental variable extension for dealing with endogenous market access indicators. Second, it advances the empirical port literature by developing a unique panel dataset on Norwegian container ports encompassing a comprehensive set of foreland and hinterland connectivity measures. Our comprehensive assessment suggests that the role of market access in determining port efficiency is uncertain.Market access and seaport efficiency: the case of container handling in NorwaypublishedVersio

Environmental regulations and allocative efficiency: application to coal-to-gas substitution in the U.S. electricity sector

The environmental economics literature has for a long time been occupied with the relationships between environmental regulations, technical efficiency, and productivity growth. This paper extends this discussion by taking up environmental regulations’ implications for allocative efficiency. It establishes a model framework that allows disentangling managerial and regulatory induced allocative efficiencies, and utilizes Data Envelopment Analysis to a sample of 67 coal-to-gas substituting power plants observed from 2002 to 2008 to calculate Nerlovian profit efficiencies and their technical and allocative efficiency components. The empirical results illustrate that failing to control for environmental regulations leads to overestimation of managerial allocative efficiencies by ignoring compliance costs. Marginal abatement cost estimates that are in line with allowance prices for NOx and SO2 are further obtained.acceptedVersio

Efficiency measurement when producers control pollutants: a non-parametric approach

This paper treats efficiency measurement when some outputs are undesirable and producers control pollutants by end-of-pipe or change-in-process abatement. A data envelopment analysis framework that compares producers with similar pollution control efforts is proposed. First, my approach avoids arbitrary disposability assumptions for undesirable outputs. Second, the model is used to evaluate the interplay between pollution control activities and technical efficiency. I compare my approach to the traditional neo-classical production model that does not incorporate undesirable outputs among outputs, and to Färe et al.’s (Rev Econ Stat 71:90–98, 1989, J Econom 126:469–492, 2005) well-known model that incorporates bads. I evaluate the common assumption in the literature on polluting technologies, that inputs are allocatable to pollution control, and apply U.S. electricity data to illustrate my main point: Although my empirical model specifications are in line with the literature on polluting technologies, they rely on inputs that play an insignificant role in controlling nitrogen oxides (NOx) emissions. Consequentially, there are no reasons to expect the efficiency scores of the traditional model to differ from the efficiency scores of the other two models that account for resources employed to pollution control. Statistical tests show that my model, which explicitly takes pollution control efforts into account, produces efficiency scores that are not statistically different from the traditional model’s scores for all model specifications, while Färe et al.’s model produces significantly different results for some model specifications. I conclude that the popular production models that incorporate undesirable outputs may not be applicable to all cases involving polluting production and that more emphasis on appropriate empirical specifications is needed.acceptedVersio

Productivity growth in urban freight transport: An index number approach

Improvement of operational efficiency is a common goal of most governmental freight transport policies. Productivity and efficiency analysis consequently provides a sound knowledge base. This paper illustrates how axiomatic production theory can be applied to model road freight transport, and proposes a logistics efficiency measure as the function representation. Based thereon, a logistics productivity index that decomposes into technical, cargo mix, vehicle capacity, and efficiency changes is established to determine the rate and drivers of growth. Emphasizing urban logistics, the paper discusses the limited access to reliable data at the micro level and illustrates how local or regional freight transport can be evaluated applying pseudo panel techniques to national freight surveys. Correspondingly, the theoretical productivity index is implemented on a pseudo panel covering the 24 largest cities in Norway between 2008 and 2012, when 12 of them entered a collaboration agreement to promote efficient transport. The results indicate a modest 0.6% average productivity growth. Efficiency change is the key driver of growth, countered by technical stagnation and regress. Negative productivity growth is expected if this trend continues. Moreover, the results do not reveal productivity gains from urban agglomeration or membership of the collaboration agreement, suggesting that prevailing transport and land use policies have so far been unable to foster productivity growth in urban freight transport.acceptedVersio

Noise pollution of container handling: External and abatement costs and environmental efficiency

Kenneth Løvold Rødseth, Noise pollution of container handling: External and abatement costs and environmental efficiency, Transport Policy, Volume 134, 2023, Pages 82-93, ISSN 0967-070X, https://doi.org/10.1016/j.tranpol.2023.02.002.While previous studies have pointed to their economic significance, terminal operations are frequently ignored in transport appraisal and policy analysis. This paper develops a generic model framework for estimating noise emissions from container terminal operations to derive key metrics for port policy analysis. A novel microeconomic production model that accommodates basic acoustics is proposed. Based thereon, abatement costs are derived using optimization and marginal external costs and efficiency scores are estimated using panel data frontier estimation. The virtues of the modeling approach are illustrated using noise meter readouts combined with port activity and meteorological data from the port of Oslo, Norway.publishedVersio

Carbon dioxide emission standards for U.S. power plants: An efficiency analysis perspective

On June 25, 2013, President Obama announced his plan to introduce carbon dioxide emission standards for electricity generation. This paper proposes an efficiency analysis approach that addresses which emission rates (and standards) would be feasible if the existing generating units adopt best practices. A new efficiency measure is introduced and further decomposed to identify different sources' contributions to emission rate improvements. Estimating two Data Envelopment Analysis (DEA) models – the well-known joint production model and the new materials balance model – on a dataset consisting of 160 bituminous-fired generating units, we find that the average generating unit's electricity-to-carbon dioxide ratio is 15.3% below the corresponding best-practice ratio. Further examinations reveal that this discrepancy can largely be attributed to non-discretionary factors and not to managerial inefficiency. Moreover, even if the best practice ratios could be implemented, the generating units would not be able to comply with the EPA's recently proposed carbon dioxide standard.submittedVersio

A note on input congestion

The notion of effective space is introduced, and input congestion is explained by economic activities’ exhaustion of effective space. In this setting, I show that profit maximization is inconsistent with input congestion at the firm level, but not necessarily with input congestion at the industry level, when effective space is shared among producers

Efficiency measurement when producers control pollutants: a non-parametric approach

This paper treats efficiency measurement when some outputs are undesirable and producers control pollutants by end-of-pipe or change-in-process abatement. A data envelopment analysis framework that compares producers with similar pollution control efforts is proposed. First, my approach avoids arbitrary disposability assumptions for undesirable outputs. Second, the model is used to evaluate the interplay between pollution control activities and technical efficiency. I compare my approach to the traditional neo-classical production model that does not incorporate undesirable outputs among outputs, and to Färe et al.’s (Rev Econ Stat 71:90–98, 1989, J Econom 126:469–492, 2005) well-known model that incorporates bads. I evaluate the common assumption in the literature on polluting technologies, that inputs are allocatable to pollution control, and apply U.S. electricity data to illustrate my main point: Although my empirical model specifications are in line with the literature on polluting technologies, they rely on inputs that play an insignificant role in controlling nitrogen oxides (NOx) emissions. Consequentially, there are no reasons to expect the efficiency scores of the traditional model to differ from the efficiency scores of the other two models that account for resources employed to pollution control. Statistical tests show that my model, which explicitly takes pollution control efforts into account, produces efficiency scores that are not statistically different from the traditional model’s scores for all model specifications, while Färe et al.’s model produces significantly different results for some model specifications. I conclude that the popular production models that incorporate undesirable outputs may not be applicable to all cases involving polluting production and that more emphasis on appropriate empirical specifications is needed