'Direct and Indirect Shadow Price Estimates of Nitrate Pollution Treated as an Undesirable Output and Input', Journal of Agricultural and Resource Economics Vol. 27, No. 2 (December 2002) pp: 420-432.

The implication of treating environmental pollution as an undesirable output (weak disposability) as well as a normal input (strong disposability) on the direct and indirect shadow price and cost estimates of nitrogen pollution abatement is analyzed using Nebraska agriculture sector data. The shadow price of nitrogen pollution abatement treated as an undesirable output represents the reduced revenue from reducing nitrogen pollution. In contrast, the shadow price of nitrogen pollution abatement treated as an input reflects the increased cost of reducing nitrogen pollution. For the 1936-97 period, the estimated shadow price and cost of nitrogen pollution abatement for Nebraska ranges from $0.91 to$2.21 per pound and from $300 to$729 million, respectively.Direct and indirect approaches, disposability, nitrogen pollution, nonparametric programming, shadow price

Environmentally Adjusted Elasticity Measures

Here, using input, output and nitrogen pollution data related to one state, we propose to extend the elasticity concept to include environmental pollution treated as undesirable output to provide the environmentally adjusted elasticity measures for the period, 1936-1997 in a two-step procedure.Environmental Economics and Policy,

Environmental targets and shadow prices of bad outputs in organic and conventional farming

The shadow prices can be used as indicators of the costs of environmental regulation imposed as reflected in alternative farming technologies adopted. We illustrate our analytical findings with implications of the Finnish water protection policy measures on conventional and organic livestock farms over the period 1994-2002. Generally, the representative organic farm is found to be more technically efficient relative to its own technology than is the conventional representative farm. However, there is no statistical indication of a difference between these two particular representative farms in valuing the costs of undesirable output (manure) at the margin

Environmental performance and shadow value of polluting on Swiss dairy farms

Better understanding the trade-offs/synergies between desirable and environmentally harmful (undesirable) farm outputs is relevant for future targeting and tailoring of agri-environmental policy measures. We use a hyperbolic distance function to represent the production technology employed by Swiss dairy farms in mountainous regions, thus allowing for simultaneous expansion of desirable outputs (milk and non-milk) and contraction of undesirable output (nitrogen surplus). We calculate the farm-specific shadow price of the undesirable output. The obtained shadow prices (mean value with respect to milk output was equal to 28 Swiss francs per kg of nitrogen) provide quantitative information on farmers’ costs of reducing nitrogen pollution

Environmental efficiency : meaning and measurement and application to Australian dairy farms

Technical efficiency has been widely studied in the literature, but in its pursuit, many of the inputs used can impact on the environment. Environmental effects can be modelled as undesirable output or, as has been the case in more recent studies, as conventional inputs. This paper examines the concept of environmental efficiency and how it can be used to evaluate the performance of Australian dairy farming, using nitrogen surplus, arising from excessive applications of fertilizer, as a detrimental input. Farming promotes the image of clean and green production and if this image is to be maintained, there is a need to ensure activities are environmentally friendly.<br /

Water pollution in wastewater treatment plants: An efficiency analysis with undesirable output

The environmental efficiency of 96 Tuscan (Italian) wastewater treatment plants (WWTPs) is investigated taking into account the quality of the outgoing water in terms of pollutant. In this regard, the presence of the residual nitrogen in the outgoing treated water is considered as undesirable output. The efficiency analysis is performed by applying a novel integrated Analytic Hierarchy Process/Non-radial Directional Distance Function (AHP/NDDF) approach, combining the benefits of the two techniques. Similarly to the standard NDDF approach, the suggested model allows to include simultaneously inputs, desirable and undesirable outputs and not to overestimate the efficiency scores. At the same time, the AHP inclusion gives the possibility to directly take into account the decision maker preferences in the weighting system and to encompass some existing directional distance function models as special cases.The obtained results are then used to identify the efficiency explanatory variables: among them, the facilities' capacity, the percentage of wastewater discharged by the industrial and agricultural activities and the level of compliance with the pollutant concentration threshold set by the legislator have a significant impact on the WWTP performance. The integrated performance assessment allows the water authorities to combine the WWTP efficiency together with the environmental sustainability issue and it has the potential for further promising environmental inspections

Reallocating Agricultural Greenhouse Gas Emission in EU15 Countries

This research work uses an alternative approach for modeling agricultural greenhouse gas emissions as an undesirable output, based on the zero sum gains DEA model (ZSG-DEA BCC model). This approach reallocates agricultural greenhouse gas emissions among EU15 countries. The reallocation analysis of greenhouse gas emissions permits countries that increase their emissions negotiate the emissions reduction with the others. This negotiation process might create a quota trade system for agricultural activity.DEA, Zero Sum Gains, Movement along the Efficient Frontier, Smoothed Frontier, Greenhouse Gas Emissions, Environmental Economics and Policy, Q54, Q56,

Comparison and Evaluation of Bank Efficiency in Austria and the Czech Republic

This article compares and evaluates the efficiency of the banking sector in Austria and the Czech Republic in the period 2004-2011. The paper is divided into the following parts. It begins with a literature review dealing with the bank efficiency generally and then with the efficiency of the banking sector in chosen countries. The second section provides an overview of used methodology. The non-parametric Data Envelopment Analysis (DEA) with undesirable output is used for estimating the efficiency. The undesirable output is usually omitted by current authors. Simultaneously were used CCR and BCC models that differ in returns to scale. Section three summarizes the results, discusses them and compares the estimated efficiency rates in both states. This study also attempts to further identify the main sources of inefficiency

Dynamic Activity Analysis Model Based Win-Win Development Forecasting Under the Environmental Regulation in China

Porter Hypothesis states that environmental regulation may lead to win-win opportunities, that is, improve the productivity and reduce the undesirable output simultaneously. Based on directional distance function, this paper proposes a novel dynamic activity analysis model to forecast the possibilities of win-win development in Chinese Industry between 2009 and 2049. The evidence reveals that the appropriate energy-saving and emission-abating regulation will result in both the improvement in net growth of potential output and the steadily increasing growth of total factor productivity. This favors Porter Hypothesis.Dynamic Activity Analysis Model, Energy-Saving and Emission-Abating, Environmental Regulation, Win-Win Development

Predicting Effort and Protected Species Bycatch Under an Effort Limit or Take Caps

Many production processes feature joint production of a desirable output with an undesirable byproduct. Producers and consumers of the desirable output mutually benefit at the expense of non-consumers, who bear external damage costs imposed by production of the undesirable byproduct. A standard approach to regulating such production activities is through the combination of a limit on allowable production effort in conjunction with a cap on the level of the undesirable output. The situation is greatly complicated when the production externality is a random function which depends on the level of production effort. In this case, capping undesirable output induces a random limit on the level of the production effort, assuming further production is prohibited once the undesirable output cap is reached. One situation which fits the above description is that of controlling protected species bycatch in commercial fisheries management. Because protected species are typically rare or endangered, and hence limited in population size and distribution, protected species bycatch is by nature a rare event, subject to random variation over time periods or areas where fishing effort occurs. A standard approach to protected species bycatch mitigation is to employ some combination of effort limit and protected species take caps within a given fishing season, in order to ensure that fishing effort ends before an unacceptably large number of protected species takes has occurred. Given the inherent randomness of protected species bycatch for a given level of fishing effort, a number of questions of interest arise in comparing alternative bycatch management regimes, including: 1. If effort reaches the regulatory limit, what is the likely range of variation in bycatch? 2. What is the likely range of effort under regulation by protected species take caps? 3. What is the effect on the allowable range of effort if take caps are simultaneously implemented for multiple protected species? 4. With multiple take caps and an overall effort limit, what are the probabilities for hitting each of the different possible caps or limit? A probabilistic framework is developed herein to address these and related questions. I use a Poisson distribution to model the probability distribution of bycatch conditional on a given level of effort. A Bayesian framework for deriving predictive distributions of bycatch conditional on fishing effort is used to obtain the stochastic effort limit for a given specified limit and take caps. The methodology is applied to observer data from the Hawaii-based longline fishery for swordfish in order to address the questions posed above.Resource /Energy Economics and Policy,