New Directions in Productivity Measurement and Efficiency Analysis
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New Directions in Productivity Measurement and Efficiency Analysis

Counting the Environment and Natural Resources

Edited by Tihomir Ancev, M. A.S. Azad and Francesc Hernández-Sancho

This book explores novel research perspectives on the intersection of environmental/natural resource economics and productivity analysis, emphasizing the link between productivity and efficiency measurement and environmental impacts. The purpose of the book is to present new approaches and methods for measuring environmentally adjusted productivity and efficiency, and for incorporating natural resources in standard national accounting practices. These methods are applicable in many contexts, including air and water pollution, climate change, green accounting, and environmental regulation
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Chapter 3: Modeling pollution abatement technologies as a network

Rolf G. Färe, Shawna Grosskopf and Carl A. Pasurka Jr.


One approach used to calculate the costs and productivity changes associated with pollution abatement involves modeling the joint production of good and bad outputs. The joint production model treats the process of transforming inputs into good and bad outputs as a black box. We investigate the consequences of generalizing the transformation process by introducing a network technology that looks inside the black box, which consists of a set of sub-technologies or sub-processes. Both models are operationalized using a panel dataset of coal-fired power plants to compare empirical results generated by the two specifications of the production technology.

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