Modeling emission-generating technologies: reconciliation of axiomatic and by-production approaches

Sushama Murty () and R. Robert Russell ()
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R. Robert Russell: University of California, Riverside

Empirical Economics, 2018, vol. 54, issue 1, No 2, 7-30

Abstract: Abstract We study the link between two recent approaches to modeling emission-generating technologies: the by-production approach and the axiomatic approach. The by-production approach models these technologies as intersections of two independent sub-technologies reflecting (1) the relations between goods in intended-output production designed by human engineers and (2) the emission-generating mechanism of nature governed by material-balance considerations. The axiomatic approach proposes a set of axioms that a pollution-generating technology should satisfy. We show that the by-production technology satisfies these axioms and that, conversely, any technology satisfying the axioms can be decomposed into two sub-technologies satisfying the by-production properties. In either approach, the technology can be functionally represented by two radial distance functions with well-defined properties. These distance functions can also serve as measures of technological and environmental efficiency. We exploit the link between the by-production and axiomatic approaches to offer preliminary suggestions about suitable functional forms for the empirical estimation of the two distance functions.

Keywords: Emission-generating technologies; By-production technologies; Free input and output disposability; Costly disposability; Distance function (search for similar items in EconPapers)
JEL-codes: D20 D24 Q50 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (26)

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Related works:
Working Paper: Modeling Emission-Generating Technologies: Reconciliation of Axiomatic and By-Production Approaches (2016)
Working Paper: Modeling emission-generating technologies: Reconciliation of axiomatic and by-production approaches
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DOI: 10.1007/s00181-016-1183-4

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