Many production activities generate undesirable byproducts in conjunction with the desirable outputs they produce. The present study uses an output distance function approach and its duality with the revenue function to estimate the marginal abatement cost of CO2 emissions from a sample of thermal plants in India. Two sets of exercises have been undertaken. The marginal abatement cost is first ...

We study the optimal transition from fossil fuels to renewable energy in a neoclassical growth economy with endogenous technological progress in energy production. Technological innovations maintain a fairly constant cost of fossil fuel energy even as increased exploitation raises mining costs. Nevertheless, the economy transitions to renewable energy once energy costs escalate after about 80% ...

This working note provides a basic overview of discounting in the context of climate change policy. After defining the social discount factor and social discount rate in terms of shadow prices (section 2), and noting the limitations of cost-benefit analysis for climate change (section 3), the determination of efficient social discount rates is discussed given: the impact of uncertainty about fu...

Article history: Received 8 May 2006 Received in revised form 10May 2007 Accepted 1 June 2007 Available online 13 July 2007 Theproduction efficiency and shadowprices of three environmental outputs (BOD,COD, andSS) of 63 household-level paper-recycling units, from a recycling craft village in Vietnam, are assessed A two-stage procedure, linear programming and stochastic estimation, is used to es...

The present study attempts to estimate the shadow price of unextracted groundwater in the Vozvozi aquifer. In the context of this study, we model the production function of vertically integrated agricultural firms in terms of an input-oriented distance function with multiple inputs. Duality theory is employed in order to extract information regarding the in situ shadow price of groundwater. Thi...

Manyeconomicmodels andoptimizationproblemsgenerate (endogenous) shadow prices—alias dual variables or Lagrange multipliers. Frequently the “slopes” of resulting price curves—that is, multiplier derivatives—are of great interest. These objects relate to the Jacobian of the optimality conditions. That particular matrix often has block structure. So, we derive explicit formulas for the inverse of ...

Private sector research and development (R&D) in food processing has seen a growing share of agricultural R&D. This paper analyzes market and technological links between farmer-entrepreneurs and food processing firms. It is shown that processing sector R&D tends to display explosive cycles. To avoid explosive cycles, the processing sector sets the R&D growth path and its target. Dynamic adjustm...

This study examines the effect of banning antimicrobial growth promoters on efficiency in the production of weaned and slaughter (finishing) pigs. We focus on the reaction of producers and production efficiency. We evaluate the estimated output and input shadow prices relative to market prices to analyse producer reactions and capture the impact on production efficiency by evaluating the effect...

The paper highlights the importance of design in product innovation, using portable computers as an empirical case study. This is an attempt to redress the balance in the innovation and product technology literature, which has overwhelmingly focused on hardware technologies (technical characteristics) of products. Principal components analysis is used to identify clusters of design characterist...

We consider the problem of designing an efficient liver allocation system for allocating donated organs to patients waiting for transplantation, the only viable treatment for end-stage liver disease. Given the scarcity of available organs relative to the number of patients waiting for transplantation, we model the system as a multiclass fluid model of overloaded queues, which captures the disea...