Economic allocation

Bo P. Weidema

Chapter 49 in Elgar Encyclopedia of Life Cycle Sustainability Assessment, 2026, pp 173-174 from Edward Elgar Publishing

Abstract: Economic allocation refers to partitioning the input or output flows of a process or a product system between the product system under study and one or more other product systems proportionally to the revenue obtained from each co-product. Thus, the partitioning results in as many partitioned systems as there are co-products in the original system. It is a reasonable expectation that a product system that models a physical reality should maintain energy and mass balances, also at the level of chemical elements, so that, for example, a system producing silver rings should have an input of silver that matches that of the silver in the rings and any silver lost in the production. Yet, this expectation is not fulfilled for any allocated system by any of the hitherto practically applied partitioning methods. Furthermore, partitioning results in a biased model of the market reactions in the product system.

Keywords: Partitioning; Revenue allocation; Joint production; ISO 14044; Physical conservation laws; Model bias (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035309887
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