environmental regulation and u s economic growth in this article we quantify the costs of pollution controls by reporting the results of simulations of the growth of the u s economy with and without regulation for this purpose we have constructed a detailed model of the economy that includes the determinants of long term growth we have also analyzed the interaction between industries in order to capture the full repercussions of environmental regulations however we have not attempted to assess the benefits resulting from a cleaner environment we find that pollution abatement has emerged as a major claimant on the resources of the u s economy the cost of emission controls is more than 10 of the total cost of government purchases of goods and services

wind power regional development and benefit sharing the case of northern sweden this paper addresses the question of how investments in wind power can promote regional development and employment as well as how different benefit sharing instruments e g community funds etc

wind power price trends in the united states struggling to remain competitive in the face of strong growth the amount of wind power capacity being installed globally is surging with the united states the world leader in terms of annual market share for three years running 2005 2007 the rapidly growing market for wind has been a double edged sword however as the resulting supply demand imbalance in wind turbines along with the rising cost of materials and weakness in the u s dollar has put upward pressure on wind turbine costs and ultimately wind power prices two mitigating factors reductions in the cost of equity provided to wind projects and improvements in project level capacity factors have helped to relieve some of the upward pressure on wind power prices over the last few years because neither of these two factors can be relied upon to further cushion the blow going forward policymakers should recognize that continued financial support may be necessary to sustain the wind sector at its current pace of development at least in the near term though this article emphasizes developments in the u s market for wind power those trends are similar to and hold implications for the worldwide wind power market

emission standards and stochastic waste load empirical work regarding the impact of environmental regulations on firm behavior has been developed under the assumption that emissions of pollutants are deterministic the implication is that the regulation is effective only when the constraint is exactly satisfied in real life however it is seldom the case that emission constraints are exactly satisfied the purpose of this paper is to find out whether regulation schemes are ineffective or whether the structure is an optimal reaction to random fluctuations in emissions the swedish pulp and paper industry is used as an empirical illustration

can a carbon trading system promote the transformation of a low carbon economy under the framework of the porter hypothesis empirical analysis based on the psm did method abstract global warming is one of the issues of great concern in the world the large scale use of fossil fuels has led to the continuous increase in carbon emissions resulting in global energy shortages and environmental pollution reasonable and strict environmental regulation promotes technological innovation by enterprises to achieve a win win situation between the economy and environment which is the core idea of the porter hypothesis the choice of china as the world s largest energy consumer and carbon emitter is not only related to the country s own mode of economic growth but also determines the development of the world s low carbon economy we used the panel data from 2000 to 2016 of 30 provincial level administrative regions in china and adopted the propensity score matching difference in differences method to test the impact of china s carbon trading pilot system on the transformation of a low carbon economy the empirical results show that under the constraints of the established resources and environment there is a positive relationship to some extent between china s carbon trading system and low carbon economic transformation this relationship can realize the win win situation of environmental and economic benefits as advocated by the porter hypothesis and further verify the applicability of the porter hypothesis

the efficiency and equity consequences of two part tariffs in electricity pricing ahstrat t this paper evaluates electricity two part tariffs with both efficiency and equity criteria the efficiency of tariffs is analyzed by studying the relation between price and marginal cost for both customer connection and variable output the equity of tariffs is addressed by an analysis of cross subsidization to address these issues this paper presents a multiproduct cost function that can provide information on output and connection marginal costs for each customer class using a 1980 cross section of electric utilities it is shown that prices are not set in a first best efficient manner and least favor the commercial class

plant vintage technology and environmental regulation abstract we use data on productivity and pollution abatement costs at individual pulp and paper mills to test whether the impact of environmental regulation on productivity differs by plant vintage and technology plants with higher pollution abatement costs have significantly lower productivity levels this relationship differs greatly based on a plant s technology with productivity at integrated mills being greatly affected by abatement costs while the impact at non integrated mills is negligible plant vintage does not seem to matter with older and newer plants showing similar impacts reported abatement costs appear to substantially understate the true costs of abatement accounting for the impact of technology differences makes some difference in the estimated overall impact of environmental regulation

economics health and health economics hyes healthy years equivalent versus qalys quality adjusted live year this paper responds to culyer and wagstaff s cw and buckingham s b arguments we refute their claim about the equivalence of hyes and qalys they fail to distinguish between choice under uncertainty and under certainty cw assume that all individuals have a specific form of utility function which yields their conclusion of equivalence b s arguments confuse the measurement technique and the utility theory from which it stems his argument about the normative superiority of the qaly construct is inconsistent with economic thinking the hye by being compatible with the principles of economics is superior to the qaly for economic evaluations of health care interventions

will the locals benefit the effect of wind power investments on rural wages abstract an important and poorly understood question when communities consider wind power investments is whether the local population will benefit financially i examine the effect of wind power investment on wages in rural counties in the us i combine quarterly panel data on wages with data on all wind power plant investments larger than 1 megawatt mw using a bayesian multilevel model estimated by mcmc i estimate a significant positive effect with a magnitude consistent with a 2 permanent increase in wages following an investment in a large wind farm of 400 mw however this effect has large geographic and socioeconomic variation counties with low employment tend to see little impact on wages from wind power potentially because slack in the labor market prevents wages from rising from a policy perspective these results are most relevant for local regulators and planners who seek to balance the benefits and costs of wind farms to the community this research indicates that wind farms can provide on average a modest boost to local wages with some areas seeing an out sized effect

cost functions and nonlinear prices estimating a technology with quality differentiated inputs the paper is concerned with developing a production theory for the case when some inputs have nonlinear prices because the price depends on endogenous quality this involves extending the notion of a cost function to the case where nonlinear prices are parameters of costs after developing the appropriate theory we apply our results to the case of coal fired electric power generation where fuel quality depends on sulfur and ash impurities environmental regulations induce a negative value on sulfur whereas ash impurities degrade performance and thus reduce production possibilities a number of empirical results emerge including significant rates of technological change that are sulfur and ash saving though capital using this change may explain in part the recent drop in the price of sulfur allowances in the united states

abatement investments and green goodwill this paper develops and estimates a dynamic model that links profits to green goodwill assuming that abatement investments generate green goodwill and using data from the swedish pulp industry we are able to test the effects of green goodwill on firm level output price and profits the results suggests that swedish pulp plant output prices and profits may be positively related to changes in green goodwill furthermore no evidence is found to support the existence of adjustment costs due to abatement investments

environmental regulation and competitiveness empirical evidence on the porter hypothesis from european manufacturing sectors abstract this paper investigates the weak and strong versions of porter hypothesis ph focusing on the manufacturing sectors of 17 european countries between 1997 and 2009 the hypothesis that well crafted and well enforced regulation would benefit both the environment and the firm was originally proposed by porter 1991 and porter and van der linde 1995 to date the literature has analyzed the impact of environmental regulation on innovation and on productivity mostly in separate analyses and focusing on the usa the few existing contributions on europe study the effect of environmental regulation either on green innovation or on performance indicators such as exports we instead look at overall innovation and productivity impacts first focusing on overall innovative activity allows us to account for potential opportunity costs of induced innovations second productivity impacts are arguably the most relevant indicators for the strong ph as a proxy of environmental policy stringency we use pollution abatement and control expenditures pace one of the few sectoral level indicators available we remedy upon its main drawback namely potential endogeneity by adopting an instrumental variable estimation approach we find evidence of a positive impact of environmental regulation on the output of innovation activity as proxied by patents thus providing support in favor of the weak ph this result is in line with most of the literature on the other front we find no evidence in favor of the strong ph as productivity appears to be unaffected by the degree of pollution control and abatement efforts

what blows in with the wind the shift toward renewable forms of energy for electricity generation in the electricity generation industry has clear implications for the spatial distribution of generating plant traditional forms of generation are typically located close to the load or population centers while wind and solar powered generation must be located where the energy source is found in the case of wind this has meant significant new investment in wind plant in primarily rural areas that have been in secular economic decline this article investigates the localized economic impacts of the rapid increase in wind power capacity at the county level in texas unlike input output impact analysis that relies primarily on levels of inputs to estimate gross impacts we use traditional econometric methods to estimate net localized impacts in terms of employment personal income property tax base and key public school expenditure levels while we find evidence that both direct and indirect employment impacts are modest significant increases in per capita income accompany wind power development county and school property tax rolls also realize important benefits from the local siting of utility scale wind power although peculiarities in texas school funding shift localized property tax benefits to the state

the impact of environmental regulations on industry productivity direct and indirect effects abstract the paper develops an approach to measuring the impact of environmental regulations on total factor productivity growth which is less restrictive than a simple growth accounting approach environmental regulations have a direct impact on productivity growth due to the diversion of resources toward required abatement capital there can be a further indirect effect however as conventional inputs and production processes are changed in response to requirements to purchase abatement capital we estimate this indirect effect using a flexible functional form cost function total factor productivity and the direct and indirect productivity effects of environmental regulations are presented for five polluting industries we find that the indirect effect can be either positive or negative and in all industries is energy using the net impact of environmental regulations on total factor productivity growth is fairly small given that these are the most polluting industries they account for about 10 30 of the productivity decline of the 1970s in these industries

firm behaviour under pollution ratio standards with non compliance this paper compares a firm s short run optimal production and abatement rules under emission level standards and standards expressed in terms of emissions per unit of output ratio standards the models allow for non compliance with standards with expected penalties dependant on either level or relative violations of the standard in question it is shown that ratio arguments make a difference to the optimal decision rules derived for a profit maximising firm for example for a given level of emissions the firm both produces more and abates more under a ratio standard so that ratio and level standards cannot be used interchangeably to achieve the same combination of emissions and output the implications for the efficiency of pollution control are briefly discussed

corruption federalism and policy formation in the oecd the case of energy policy we investigate whether the effect of government corruption is conditional on a country s institutional structure federal systems have an additional layer of government making lobbying relatively more costly we investigate whether the effect of government corruption on environmental policy in the form of restrictions on energy use is conditional on a federal system being in place using 1982 96 data from 11 industry sectors in 12 oecd economies we find that while greater government corruption reduces the stringency of environmental policy the effect declines in federal systems

the economic costs of environmental regulation in u s dairy farming a directional distance function approach analyses of the costs of regulating greenhouse gas emissions from dairy production which could be used to assess the effectiveness of alternative policy measures is a missing link in the literature this article addresses this gap by establishing the economic impact associated with a hypothetical greenhouse gas environmental regulatory regime across major dairy producing counties in the united states in doing so the article makes three important contributions to the literature first it develops a comprehensive pollution index based on environmental protection agency methodologies which contrasts with previous studies that rely on partial measures based only on surplus nitrogen stemming from the over application of fertilizer second the article uses a directional output distance function an approach that has not been employed previously to evaluate polluting technologies in the u s dairy sector third the article incorporates a four way error approach that accounts for unobserved county heterogeneity time invariant persistent technical efficiency time varying transient technical efficiency and a random error the results indicate that regulating greenhouse gas emissions from dairy farming would induce a 5 percentage point increase in average technical efficiency in addition the economic costs of implementing this hypothetical regulatory framework exhibit significant spatial variation across counties in the united states

a real options approach to abatement investments and green goodwill in this paper we adopt the green goodwill argument as to why firms voluntarily invest in abatement capital we investigate the effects on the abatement investment decision of changes in uncertainty about future green goodwill competitor abatement investments regulations etc using a real options framework our results indicate that increased uncertainty about consumers willingness to pay for green products in the future discourage voluntary abatement investments the model also suggests that voluntary abatement investments are promoted by an increased threat of regulation and competitor abatement investments furthermore the benefit cost ratio of the abatement investment project at the point where it is optimal to invest is independent of what regulatory regime stringent or lenient the firm operates in we also conclude that despite the fact that voluntary abatement investment exists there may still be room for environmental policy

erratum standards versus standards the effects of different pollution restrictions when economists refer to pollution standards they almost universally mean uniform restrictions on pollution emissions e g william j baumol and wallace e oates 1975 ch 13 susan rose ackerman 1973 david besanko 1978 however in practice standards take many forms not only emissions restrictions but restrictions on pollution per unit of output or per unit of an input restrictions on the use of a polluting input or mandated use of a particular pollution control technology these specifications of regulations will have a variety of effects on a firm s resource allocation decisions for instance allowing pollution per unit of output as the standard instead of directly restricting the level of pollution gives the firm some choice in addition to reducing pollution it can increase its output to dilute the pollution this paper examines the effects of five different forms of pollution standards on input decisions the level of production and firm profits the results show that the different standards by providing firms with different incentives change the firm s allocation decisions and affect the relative profitability of the standards section i reviews the existing literature on the incentives of different instruments the following section describes the model to be used five different forms of pollution constraints are individually examined in section iii using a graphical approach their relative effects as well as some special cases are assessed in section iv finally section v raises the case of different standards when firms are not identical

growth and renewable energy in europe a random effect model with evidence for neutrality hypothesis this is an empirical study on the causal relationship between economic growth and renewable energy for 27 european countries in a multivariate panel framework over the period 1997 2007 using a random effect model and including final energy consumption greenhouse gas emissions and employment as additional independent variables in the model empirical results do not confirm causality between renewable energy consumption and gdp although panel causality tests unfold short run relationships between renewable energy and greenhouse gas emissions and employment the estimated cointegration factor refrains from unity indicating only a weak if any relationship between economic growth and renewable energy consumption in europe suggesting evidence of the neutrality hypothesis which can partly be explained by the uneven and insufficient exploitation of renewable energy sources across europe

effects of pollution control on industry productivity a factor demand approach four major manufacturing industries are examined the abatement effect on capital and labor productivity are determined from parameters of a system of factor demand equations which allow for disequilibrium in factor markets the system is estimated for each industry with annual time series data from 1960 to 1980 abatement requirements were found to retard both average capital productivity and average labor productivity in three of the four industries paper chemicals and primary metals for several industries in which factor productivity was slower after 1973 environmental controls accounted for a significant proportion of that slow down

renewable energy an efficient mechanism to improve gdp abstract this article analyzes the effects of renewable energy on gdp for 116 economies in 2003 through structural equation modeling sem approach in order to decipher the mechanism of how the use of renewables improves macroeconomic efficiency we decompose gdp by the expenditure approach although previous theory predicts positive effects of renewables on capital formation and trade balance the sem results show that renewables have a significant positive influence on capital formation only the result that renewables do not have a significant impact on trade balance implies that renewables do not have an import substitution effect thus we confirm the positive relationship between renewable energy and gdp through the path of increasing capital formation but not for the path of increasing trade balance

environmental regulations and productivity growth the case of fossil fueled electric power generation this paper measures and analyzes the effect of sulfur dioxide emission restrictions on the rate of productivity growth in the electric power industry over the 1973 79 business cycle a firm specific measure of regulatory intensity is developed which depends on the severity of the emission standard the extent of enforcement and the unconstrained emission rate relevant to each utility the results indicate that emission regulations result in significantly higher generating costs primarily from the increased use of low sulfur fuels the average rate of productivity growth was reduced by 0 59 percentage points per year for constrained utilities

the impacts of the clean air act on production cost and the substitution between inputs in the electric utility industry abstract the paper examines how having to comply with phase 1 of title iv of the 1990 clean air act affected production cost and the substitution between fuel and non fuel labor capital inputs phase 1 required firms to reduce their sulfur dioxide emissions enacting procedures to reduce sulfur dioxide emissions using lower sulfur content coal or other fuel sources could lead to higher cost and impact the substitution between fuel and non fuel inputs using a 1992 2000 panel of 34 u s electric utilities empirical results indicate that the procedures electric utilities enacted to comply with phase 1 contributed to small increases in both marginal cost and total cost firms having to comply with phase 1 were more willing than firms not subject to phase 1 to substitute from fuel to non fuel labor capital inputs following an increase in the price of fuel utilities subject to phase 1 that had a fuel clause were more willing than phase 1 firms without a fuel clause to substitute from non fuel inputs to fuel when the price of the non fuel input increased

the costs of water pollution regulation in the pulp and paper industry this paper studies plant level data on actual and permitted levels of water pollution emissions for the pulp and paper industry there is widespread and substantial overcompliance with the relevant regulations aggregate bod emissions in 1992 were only 50 of the amount allowed overcompliance appears to imply a zero marginal abatement cost and its prevalence therefore has the potential to substantially change the debate over the costs of regulation we show instead that plants incurred substantial costs to overcomply marginal abatement costs were roughly 13 000 ton in 1992 we discuss possible explanations for costly overcompliance and their implications for estimation

second best energy policies for heterogeneous firms this paper investigates second best issues in the regulation of external costs of energy use by heterogeneous firms the efficiency of regulatory energy policies depends in general on the policy incentives given for both output reduction and input substitution the resulting endogeneity of firms supply functions appears to lead to complicated policy rules in contrast to earlier efforts the analysis considers an arbitrarily large number of non identical price taking firms in a joint market a large variety of possible production functions including varying levels of economies of scale and possibilities for input substitution and elasticities of market demand which may vary from completely elastic to completely inelastic two second best instruments are considered namely output taxes and energy efficiency standards and are compared to the benchmark of first best energy taxes the underlying market factors determining the relative efficiency of these second best instruments when used optimally are identified

do economic effects justify the use of fiscal incentives the community of location this presumption serves as the basis for the granting of lucrative economic development incentives to footloose businesses this article examines whether large mobile firms generate significant net benefits for the region of location panel data and nonrandom estimation techniques are applied to a primary database of large firms that made location decisions in the 1980s to explore the impact of location on regional economic performance the empirical analysis explores different treatment regions both effects within the county and the metropolitan statistical area msa of location and different control regions the results show that large firms fail to produce significant net benefits for their host communities calling into question the high stakes bidding war over jobs and investment

natural versus manufactured capital win lose or win win a case study of the finnish pulp and paper industry abstract the effect of investments on environmental variables has been discussed through the win win rhetoric specifically in micro level analysis on the macro level the win win rhetoric has been replaced by the arguments for and against the substitutability of natural and manufactured capital here these two concepts belonging to different levels of analysis are linked by looking at the environmental and economic effects of chosen investment strategies in a traditionally capital intensive industry over time the paper shows that rather than generalise the existence of win win situations or the substitutability of capital these positions are determined by purely situational factors as a result in the assessment of substitutability the specific operating context of the industry needs to be taken into account this implies also that environmental policy needs to be designed to be adaptive and responsive to those situational factors to create beneficial outcomes for the economy and for the environment

evaluating the economic impact of wind power development on local economies in china abstract given that wind power has received so much public financial support it is important not only to understand its overall impact but also who receives the benefits and who bears the costs one important aspect is to quantitatively evaluate the potential impact of wind power development on local economies this study conducts an ex post econometric assessment of the effect of wind power installation on local economy in china using a national county level dataset between 2005 and 2011 we find that installed wind power capacity has a small and statistically significant positive effect on gdp but negatively affect local fiscal income based on our results an additional 1 mw wind power installation per capita would bring 2246 rmb increase in gdp per capita over the year 2005 and 2011 the annual benefits is about 321 rmb 45 increase in gdp per person which is much lower than the estimates for u s case we further explore why china s wind power development did not benefit local economy as much as the case of u s

does technological innovation really reduce marginal abatement costs some theory algebraic evidence and policy implications the existing literature models innovation in pollution control as a reduction in marginal abatement costs we show that this assumption is inappropriate for production process innovations such as fuel switching algebraically we examine the effects of different innovation types on marginal abatement cost curves showing that some desirable innovations increase marginal abatement costs empirically we estimate marginal abatement costs for sulfur dioxide by measuring the output distance function for electric power in korea regression results confirm that production process innovations did raise marginal abatement costs in this case one policy implication economic instruments do not always provide stronger innovation incentives than command and control policies

administrative costs and instrument choice for stochastic non point source pollutants this paper extends the empiricalanalysis of non point source pollution to thecase where the pollutant is stochastic andalternative regulatory instruments havedifferent administrative costs it also appliesa method of stochastic programming whereemissions are log normally distributed forthe kennet catchment in south west england werank a range of policies in terms of abatementcosts alone and total costs abatement andadministrative costs on the basis ofabatement costs alone a uniform emission taxis the cost minimising policy but on the basisof total cost a nitrogen input tax is theleast cost policy furthermore the policyranking based on total costs changes as thereliability standard increases

the role of federal renewable fuel standards and market structure on the growth of the cellulosic biofuel sector abstract this article examines the effect of the renewable fuel standards and market power on the growth of the cellulosic biofuel sector we develop a sectoral model to show how changes in the regulations governing cellulosic fuel production affect the equilibrium quantity of cellulosic ethanol based on model calibration for washington state we find that existing low cost waivers purchased by obligated parties in lieu of cellulosic fuel production negate the effectiveness of the renewable fuel standard to induce the production and consumption of cellulosic biofuels however raising waiver price slightly relative to the status quo significantly increases the equilibrium quantity of cellulosic ethanol the high cost of cellulosic ethanol production is often cited as the cause of the lack of cellulosic ethanol production which is used to justify low waiver prices our policy message is the converse the low current waiver price significantly contributes to the cellulosic ethanol market stagnation in the context of the current biofuel policy

double dipping in environmental markets abstract there is an increasing tendency to use markets to induce the provision of environmental services as such markets increase in scope potential market participants might sell multiple environmental services the question we consider here is whether participants in such markets should be allowed to sell credits in more than one market simultaneously some have argued in favor of such double dipping because it would make the provision of environmental services more profitable in practice however most programs do not allow double dipping we show that if the optimal level of pollution abatement is sought then double dipping maximizes societal net benefits however if pollution policies are set in a piecemeal fashion then the caps for each market are unlikely to be optimal and in this second best setting a policy prohibiting double dipping can lead to greater social net benefits we explore conditions under which a single market policy is preferred or equivalently where piecemeal policies are likely to yield particularly inefficient outcomes

a review of low carbon fuel policies principles program status and future directions a low carbon fuel standard lcfs is a market based policy that specifies declining standards for the average lifecycle fuel carbon intensity afci of transportation fuels sold in a region this paper i compares transportation fuel carbon policies in terms of their economic efficiency fuel price impacts greenhouse gas emission reductions and incentives for innovation ii discusses key regulatory design features of lcfs policies and iii provides an update on the implementation status of lcfs policies in california the european union british columbia and oregon the economics literature finds that an intensity standard implicitly taxes emissions and subsidizes output the output subsidy results in an intensity standard being inferior to a carbon tax in a first best world although the inefficiency can be corrected with a properly designed consumption tax or mitigated by a properly designed carbon tax or cap and trade program in california from 2011 to 2015 the share of alternative fuels in the regulated transportation fuels pool increased by 30 and the reported afci of all alternative fuels declined 21 lcfs credit prices have varied considerably rising to above 100 credit in the first half of 2016 lcfs programs in other jurisdictions share many features with california s but have distinct provisions as well c 2016 elsevier ltd all rights reserved

comparative statics of a monopolistic firm facing price cap and command and control environmental regulations abstract an exhaustive comparative statics analysis of a model of a monopolistic firm facing price cap regulation and a variety of commonly implemented command and control environmental regulations is carried out the comparative statics are intrinsic to each of the models and thus form their basic empirically testable properties several unanticipated results emerge from the analysis in particular it is shown that a subset of the intrinsic comparative statics are qualitatively invariant to all of the commonly employed command and control environmental regulations that a price cap regulated profit maximizing monopoly might face while others are specific to the type of command and control environmental regulation in place

the importance of revenue sharing for the local economic impacts of a renewable energy project a social accounting matrix approach allan g mcgregor p and swales k the importance of revenue sharing for the local economic impacts of a renewable energy project a social accounting matrix approach regional studies ambitious renewable energy targets are requiring investments in new renewable capacity in areas where acceptance could be affected by the potential economic benefits to the locality at the same time new renewable energy projects primarily for onshore wind capacity might offer a route by which peripheral economic development policies can be supported the economic impacts of these projects are difficult to quantify using input output techniques but can be more appropriately handled within a social accounting matrix sam framework a social accounting matrix for the shetland islands off the north coast of mainland scotland is used to evaluate the potential local economic and employment impacts of a large proposed onshore wind energy project sensitivity analysis reveals the relative importance of the level of commu

permit trading and credit trading a comparison of cap based and rate based emissions trading under perfect and imperfect competition this paper compares emissions trading based on a cap on total emissions permit trading and on relative standards per unit of output credit trading two types of market structure are considered perfect competition and cournot oligopoly we find that output abatement costs and the number of firms are higher under credit trading allowing trade between permit trading and credit trading sectors may increase welfare with perfect competition permit trading always leads to higher welfare than credit trading with imperfect competition credit trading may outperform permit trading environmental policy can lead to exit but also to entry of firms entry and exit have a profound impact on the performance of the schemes especially under imperfect competition we find that it may be impossible to implement certain levels of total industry emissions under credit trading several levels of the relative standard can achieve the same total level of emissions

export sectors and rural development the export base hypothesis is that a region s growth is led by export demand given perfectly elastic factor supplies it is a rationale for sector based rural development policies and it is formalized by input output models but it is contested by modern trade migration and growth theories and there is little research about its empirical relevance we investigate the hypothesis for contemporary u s rural development by estimating the influence of export sector employment on subsequent rural development outcomes the results reject the hypothesis that emphasizing traditional export employment results in rural growth reject the assumption of perfectly elastic factor supply and support alternative explanations copyright 2009 oxford university press

export performance and productivity growth the case of taiwan the hypothesis that rapid growth of exports accelerates economic growth has been widely discussed and tested the empirical evidence that supports the hypothesis includes studies by m michaely b balassa p heller and r porter w tyler g feder r kavoussi and r ram using macrodata and m nishimizu and s robinson using two digit industry level data feder found that exports contribute to economic growth because the export sector is not only more productive than the nonexport sector but also generates some external effects that enhance the productivity of the nonexport sector as exports expand both the resource reallocation effect and externality effect lead to an economy wide productivity increase nishimizu and robinson also found the existence of a significant correlation between productivity growth and export expansion on a theoretical level there are at least two interpretations of the correlation between productivity growth and export expansion one stresses scale economies the other stresses competitive forces the scale economies argument emphasizes the benefits that can be derived by means of expanding the scale of operations in the case of countries whose domestic markets are small in size exporting becomes an essential part of achieving scale economies j bhagwati considered scale economies to be a plausible explanation for the superiority of the export promotion trade strategy as opposed to the import substitution trade strategy but warned against the lack of convincing evidence 2 the study by j kwon on the korean manufacturing industry also found that scale economies are a main factor contributing to total fac

regulation by prices quantities or both a review of instrument choice choosing appropriate policy instruments is an important part of successful regulation once objectives are agreed and suitable targets adopted policy makers can employ command and control regulation and or economic instruments and choose between fixing a price or a quantity this paper examines the relative advantages of price quantity and hybrid instruments according to their efficiency under uncertainty the trade off between credible commitment and flexibility implementation international considerations and political economy various illustrations of the theory are provided with two detailed applications to climate change and transport policy specifically congestion and safety pricing

multilateral productivity comparisons when some outputs are undesirable a nonparametric approach multilateral productivity comparisons of firms producing multiple outputs some of which are undesirable are obtained by making two modifications to the standard farrell approach to efficiency measurement the restriction that production technology satisfy strong disposability of outputs is relaxed to allow for the fact that undesirable outputs may be freely disposable and the efficiency measures are modified to allow for an asymmetric treatment of desirable and undesirable outputs performance measures that satisfy these requirements are calculated as solutions to programming problems the methodology is applied to a sample of mills producing paper and pollutants

the impact of regulatory reforms on cost structure ownership and competition in indian banking this paper evaluates the impact of financial sector reforms on the cost structure characteristics and on the ownership cost efficiency relationship in indian banking it also examines the impact of reforms on the dynamics of competition in the lending market we find evidence that deregulation improves banks performance and fosters competition in the lending market results suggest technological progress once indian commercial banks have adjusted to the new regulatory environment this however does not translate in efficiency gains there is also evidence of an ownership effect on the level and pattern of efficiency change finally competition keeps building pace even in the re regulation period and technological improvements are not hampered by the tightening of prudential norms

productivity growth and environmental regulation in mexican and u s food manufacturing many argued during the nafta debate that trade liberalization would favor mexican over u s food processors especially because of lax environmental laws south of the border we find through an examination of profit functions that productivity growth in mexico has outstripped that in the united states suggesting free trade indeed will benefit mexican suppliers u s pollution regulations have had no impact on the profitability or productivity of u s food manufacturing in contrast mexico s swiftly rising environmental standards have enhanced food processors productivity growth corroborating the porter hypothesis pollution law therefore has favored mexican over u s food processing but for reasons few had anticipated

on emissions trading and market structure cap and trade versus intensity standards this paper examines the interdependence between imperfect competition and emissions trading we particularly analyze the long run equilibrium in a two sector clean and dirty model with cournot competition among firms who face a fixed cost of production the clean sector is defined as the sector with the highest long run cost margin on emissions we compare the welfare implications of a cap and trade scheme with an emissions trading scheme based on relative intensity standards it is shown that a firm s long run equilibrium output in the clean or dirty sector does not depend on the emissions trading format but only depends on the fixed cost of producing in the respective sector intensity standards can result in clean firms selling allowances to dirty firms or dirty firms selling to clean firms the former outcome yields higher welfare it is demonstrated that cap and trade outperforms the intensity based trading scheme in terms of long run welfare with free entry and exit with intensity standards the size of the clean sector is too large

ex post analysis of economic impacts from wind power development in u s counties wind power development has surged in recent years in the united states policymakers and economic development practitioners to date have typically relied upon project level case studies or modeled input output estimates to assess the economic development impacts from wind power often focusing on potential local state wide or national employment or earnings impacts building on this literature we conduct an ex post econometric analysis of the county level economic development impacts of wind power installations from 2000 through 2008 in a large wind rich region in the country taking into account factors influencing wind turbine location we find an aggregate increase in county level personal income and employment of approximately 11 000 and 0 5 jobs per megawatt of wind power capacity installed over the sample period of 2000 to 2008 these estimates appear broadly consistent with modeled input output results and translate to a median increase in total county personal income and employment of 0 2 and 0 4 for counties with installed wind power over the same period

equitably slicing the pie water policy and allocation abstract non point source pollution is deteriorating water quality throughout the world new zealand is addressing this issue by regulating land based nutrient losses with debates over how to allocate limits across a heterogeneous landscape we develop a spatially explicit economic land use model to investigate efficiency and equity issues from seven approaches to allocate nutrient discharges across two new zealand watersheds we find that the preferred allocation differs across land use land characteristics and regulation stringency and that there is no universal best allocation option therefore decision makers should focus on at least efficiency and equity and on how to compensate those most affected

environmental innovations and profitability how does it pay to be green an empirical analysis on the german innovation survey much of the empirical literature analysing the relation between environmental innovation and competitiveness has focused on the question whether it pays to be green we differentiate between different types of environmental innovations which will be disentangled in those aiming at reducing the negative externalities and those allowing for efficiency increases and cost savings what we analyze is at first the extent to which these two typologies have impacts on firms profitability with opposite signs and secondly whether the motivations driving the adoption of those innovations make the difference in terms of economic gains we find empirical evidence that both the typology of environmental innovation and the driver of their adoption affect the sign of the relationship between competitiveness and environmental performance the empirical strategy is based on a sample of german firms and makes use of a merge of two waves of the mannheim innovation panel in 2011 and 2009 that allow overcoming some endogeneity issues which may arise in a cross section setting

the impact of production tax credits on the profitable production of electricity from wind in the u s a spatial financial model using wind data derived from assimilated meteorological condition was developed to investigate the profitability and competitiveness of onshore wind power in the contiguous u s it considers not only the resulting estimated capacity factors for hypothetical wind farms but also the geographically differentiated costs of local grid connection the levelized cost of wind generated electricity for the contiguous u s is evaluated assuming subsidy levels from the production tax credit ptc varying from 0 to 4 kwh under three cost scenarios a reference case a high cost case and a low cost case the analysis indicates that in the reference scenario current ptc subsidies of 2 1 kwh are at a critical level in determining the competitiveness of wind generated electricity compared to conventional power generation in local power market results from this study suggest that the potential for profitable wind power with the current ptc subsidy amounts to more than seven times existing demand for electricity in the entire u s understanding the challenges involved in scaling up wind energy requires further study of the external costs associated with improvement of the backbone transmission network and integration into the power grid of the variable electricity generated from wind

the expansion of renewable energies and employment effects in germany the promotion of electricity produced from renewable energy is a high priority of the european union as well of its member states the german government wants to increase the share of renewable energies from about 5 to 12 by 2010 to attain this goal the german government has introduced compulsory compensation schemes for electricity produced from renewable energy fed into the public grid this paper examines the economic impact of this policy employing an econometric model particular emphasis was given to employment effects in general we distinguish two effects 1 an expansive effect resulting from additional investments and 2 a contractive effect resulting from an increase in the production cost of power the first effect will dominate during the first years and lead to an increase in employment of approximately 33 000 new jobs however the contractive effect will offset these gains and lead to a slightly negative employment balance by 2010

the economic implications of using haccp as a food safety regulatory standard abstract this article discusses the nature and role of hazard analysis critical control point haccp as a food safety control system and in particular its role as an element of public food safety regulation the notion of efficiency in food safety regulation is discussed and related to the nature of food safety controls it is suggested that if appropriately applied haccp is a more economically efficient approach to food safety regulation than command and control cac interventions the economic implications of haccp are discussed with reference to estimates of the costs and benefits in particular for the food industry finally the use of haccp as an international trade standard and the facilitation of trade in processed food products is considered

welfare implications of the renewable fuel standard with an integrated tax subsidy policy abstract this paper derives the optimal integrated tax subsidy policy where one input is taxed and revenues are used to subsidize the use of a substitute input to reduce greenhouse gas emissions given the existing policies under the renewable fuel standard policies we measure the welfare effects and impact on cellulosic ethanol production after implementing the tax subsidy policy using a general equilibrium model a revenue neutral integrated tax subsidy scheme leads to a small positive tax rate for crude oil and a large positive subsidy for cellulosic ethanol because the former has a larger emissions coefficient than the latter the overall welfare effects of an integrated tax subsidy scheme are less than a 1 increase for the economy but the growth in the cellulosic ethanol industry could range from 28 to 238 because the revenues from taxing crude oil are directly used to subsidize cellulosic ethanol production

optimal investment policies for a polluting firm in an uncertain environment in this paper a stochastic dynamic model of the firm is used as a framework to study the optimality of abatement investments production causes pollution as an inevitable byproduct and in this model the latter is taxed by the government the firm can diminish these tax payments through reducing its pollution output by carrying out abatement investments it turns out that provided that its liquidity position is sufficiently strong the firm performs a growth policy such that expected marginal revenues of productive and abatement investments are balanced growth stops as soon as marginal revenue equals the shareholders time preference rate at that time dividend is paid out we also obtain that the emissions tax rate must exceed a certain lowerbound when the government wants emissions to decrease during the firm s growth phase

policies and market factors driving wind power development in the united states abstract in the united states there has been substantial recent growth in wind energy generating capacity with growth averaging 24 percent annually during the past five years about 1700 mw of wind energy capacity was installed in 2001 while another 410 mw became operational in 2002 during 2003 development activity has remained strong with an estimated 1600 mw of capacity installed with this growth an increasing number of states are experiencing investment in wind energy projects currently about half of all states host at least one wind power project this paper explores the key factors at play in the 12 states in which a substantial amount of wind energy capacity has been developed or planned some of the factors that are examined include policy drivers such as renewable portfolio standards rps federal and state financial incentives as well as market drivers such as consumer demand for green power natural gas price volatility and wholesale market rules

emissions trading ercs or allowances emissions trading takes place from two alternative baselines 1 emission reduction credits ercs in which the baseline is existing regulations which are often activity based or 2 cap and trade which specifies the total allowable emissions this paper examines the effects of these two tradable permit systems on marginal and average costs for the firm using electricity generation as an example the erc system subsidizes the activity level to which it is tied and fails to incorporate the full cost of external harm into the product price if the permit limit is chosen ef ficiently the cap and trade system is more effi cient

pollution standards vs charges under uncertainty conventional analysis of pollution control policy under uncertainty does not properly account for the potential cost effectiveness difference between standards and charges thus drawing misleading conclusions for the case of inefficient standards correcting for this anomaly the following conclusions can be drawn when uncertainty involves the position of the marginal damage cost schedule rather than policy indifference a charge is always superior to an inefficient standard when uncertainty is about the position of the marginal control cost schedule policy indifference may occur but if it does it must be the case that the slope of marginal damage cost exceeds that of marginal control cost

weitzman revisited emission standards versus taxes with uncertain abatement costs and market power of polluting firms studies dealing with the optimal choice of pollution control instruments under uncertainty have invariably taken it for granted that regulated firms face perfectly competitive markets by introducing the product market into the stochastic framework of weitzman rev econ stud 41 477 491 1974 this paper shows for the case of a polluting symmetric cournot oligopoly that weitzman s policy rule for choosing emission standards versus taxes with uncertain abatement costs is biased in the presence of market power since the oligopolists take into account their influence on the market price their total abatement effort including the restriction of output is less vulnerable to miscalculations of the tax rate compared to price taking firms consequently the comparative advantage of instruments is shifted in favour of taxes in a further step the provided policy recommendations are generalised by abolishing the assumption that firms are symmetric

environmental regulation cost and industry structure changes nonstationary markov analyses are used to investigate impacts of environmental regulatory costs associated with compliance on changes in market structure in pulp and paper industries results show environmental regulation expenditures have statistically significant effects on the probabilities of capacity moving to a larger company size category so industry structure is affected by environmental regulation however counter to expectations results further show consolidation occurs with higher probability when environmental costs are falling rather than when they are rising policy analyses that presume immediate policy responses to cost changes or that industry structure is unchanged may yield time inconsistent policy conclusions

performance versus design standards in the regulation of pollution abstract this paper presents a model of pollution regulation in an oligopolistic market two forms of regulation are considered performance standards which regulate pollution directly by an upper limit on emissions and design standards which regulate pollution indirectly by a minimum usage requirement of an enissions control input equilibria under each regulatory regime are characterized a welfare analysis reveals that performance standards are preferred to design standards if the objective is minimization of emissions plus pollution damage costs however the comparison is indeterminate if the regulator s objective is total surplus less pollution damage an equivalence between emissions taxes and performance standards is established so the above welfare comparisons also apply to emissions taxes versus design standards

emissions reductions or green booms general equilibrium effects of a renewable portfolio standard renewable portfolio standards rps are commonly promoted as a policy tool to reduce emissions associated with fossil generation while also stimulating development of local renewable resource endowments we develop a general equilibrium model of an rps policy that captures key features such as a fixed factor renewable endowment substitution across sectors of the economy and endogenous price responses we analytically decompose the effects of an rps into a a substitution effect b an output tax effect and c an output effect we show that an increase in the rps can either deliver large resource booms or large emissions savings but not both our framework can translate different renewable resource endowments and pre existing standards across states into economic and environmental impacts to inform current renewable energy and climate policies

renewable energy and employment in germany abstract the positive impacts of an increasing share of renewable energy on the mitigation of climate change as well as on the decrease of the dependency of energy imports are indisputable however one persistent problem for the german economy has been its high level of unemployment in the recent past therefore any policy strategy will be measured also by its net impact on the labor market the paper describes the results of a study that models this impact and is novel within three respects firstly an input output vector for the renewable energy sector was developed based on the results of more than 1000 interviews with an extensive questionnaire secondly gross and net effect of two different policy scenarios for germany until 2030 were calculated and thirdly the approach varies from earlier studies by its explicit modeling of export and foreign trade effects

a typology and assessment of multi sector regional economic impact models loveridge s 2004 a typology and assessment of multi sector regional economic impact models reg studies38 305 317 this paper provides a summary and critical review of the types of multi sector models with inter sectoral linkages commonly used to predict the total impact of an event plant opening closing or policy change on the regional economy the following model types are included economic base input output social accounting matrix integrated econometric input output and computable general equilibrium models appropriate uses of the various modelling approaches are presented along with some general operating principles and ethical considerations the paper concludes with directions for future research loveridge s 2004 une typologie et un bilan des modeles des impacts economiques regionaux multi sectoriels reg studies38 305 317 cet article cherche a faire le resume et la critique des typologies de modeles multi sectoriels qui ont des liens intersectoriels et dont on se sert frequemm

the role of amenities and quality of life in rural economic growth a structural model of regional economic growth is estimated using data for 2243 rural u s counties five indices designed to capture specific amenity and quality of life characteristics are constructed using fifty four separate indicators results suggest that amenity characteristics can be organized into consistent and meaningful empirical measures that move beyond ad hoc descriptions of amenities in addition to insights into the influence of local characteristics ranging from tax burdens to income distribution on regional economic growth results suggest that predictable relationships between amenities quality of life and local economic performance exist

differential environmental regulation effects on electric utility capital turnover and emissions this paper tests the hypothesis that differential regulations reduced the rate of capital turnover in the electric utility industry resulting in increased emissions of sulfur dioxide based on a sample of forty four privately owned electric utilities operating over the period 1969 83 the authors results indicate that 1 regulation increased the age of capital by an average of 3 29 years 24 6 percent 2 increases in the age of capital have no statistically significant impact on emissions and 3 in the absence of regulation emissions would have increased by 3 79 tons per million kwhs 34 6 percent copyright 1993 by mit press

environmental regulation and environmental productivity the case of china abstract constrained by the dual mission of supporting industrial growth and reducing emissions china s traditional emission reduction oriented environmental policies unavoidably face a dilemma this study adopts the gml index to calculate china s industrial productivity by considering environmental factors in addition based on the assumption of industry heterogeneity the author examines the non linear relationship between china s environmental regulation and environmental productivity and calculated the optimal regulation environment for industries according to this study when impact of undesirable outputs pollutant emissions is considered environmental regulation and environmental productivity are positively correlated which to some degree validates the porter hypothesis at present environmental regulation has significant positive effects on clean production industries but shows a lag effect on pollution intensive industries the degree of environmental regulation and environmental productivity show an inverted u shaped relation and display three thresholds it should be noted however that the relationship between regulation and productivity may vary across industries these findings have clear policy implications rather than continually increasing the level of environmental regulation the government should establish standards for individual industries that emphasize flexibility

a general index of technical change this paper outlines a procedure for estimating a general index of technical change within the context of a quite general production technology specifically when panel data are available for firms in an industry time specific dummies can be combined in a nonlinear estimation procedure to yield a general index of technical change that may be both nonneutral and scale augmenting this approach offers numerous advantages over the traditional time trend representation of technical change for example the general index can serve as the basis for analysis of the determinants of technical change results for a sample of 30 electric utilities over the period 1951 78 show that the productivity decline of the 1970s can be attributed primarily to sulphur oxide restrictions and secularly declining capacity utilization due to rapidly increasing peak load demands

the impact of wind power on the brazilian labor market abstract wind power is an important source of renewable energy beyond the environmental dimension the wind energy may contribute to the local development due to its weather conditions brazil emerges as one of the leading countries in the generation of wind power this study estimates the impact of wind farms on the brazilian labor market through the exploration of the staggered nature of the sequential process of wind farm implantation between 2004 and 2016 we estimate the treatment effect parameters using a difference in differences did approach with i multiple time periods ii variation in treatment timing and iii dynamic treatment effects through an event study design we aggregate information from several data sources into a panel and we analyze the impact on employment and wages by considering economic sectors educational levels firm sizes and types of jobs direct or indirect jobs our findings suggest that wind farms increase employment in the industry agriculture and construction and increase the wages in all economic sectors and we find evidence that this effect occurs on indirect jobs additionally we find positive effects on the employment and wages of less educated workers and of small and medium sized firms the impact of this intervention can last for up to two years after the implementation of wind farms in the municipalities our results suggest that wind power may generate significant social impacts through the labor market by contributing to local development and increasing social welfare in developing economies

the effect of the production tax credit on wind energy production in deregulated electricity markets abstract this letter estimates the asymmetric influence of the production tax credit on wind energy production i find that states with deregulated electricity markets were more responsive to the tax incentive than their regulated counterparts excluding any external benefits from wind production this dissimilarity amounts to a monthly difference of up to 464 450 in federal benefits

a note on permits standards and technological innovation abstract montero j environ econom manage 44 2002 23 contrasts the incentives to invest in new abatement technologies under different regulatory instruments and argues that one needs to consider the induced output effects that derive from lower abatement costs montero shows that once one takes into account these effects on output command and control instruments can generate stronger incentives to innovate than market based instruments this result rests on strategic output effects under command and control however he maintains that under perfectly competitive conditions market based instruments will continue to weakly dominate command and control regulation this note clarifies two issues raised by montero first i use montero s approach to show that in fact performance concentration standards will generate greater incentives to innovate than market based instruments in perfectly competitive markets one does not require strategic effects to get this result second montero abstracts from production costs and concentrates solely on abatement costs he implicitly assumes that marginal production costs are constant i show that some of montero s results change once increasing marginal production costs are considered when marginal costs are increasing the benefit of additional output is tempered and market based instruments again look more favorable

emissions taxes versus intensity standards second best environmental policies with incomplete regulation the best emissions tax or emissions cap may be an inferior instrument under incomplete regulation leakage without leakage an intensity standard regulating emissions per unit of output is inferior due to an implicit output subsidy this inefficiency can be eliminated by an additional consumption tax with leakage an intensity standard can dominate the optimal emissions tax since the implicit output subsidy prevents leakage the addition of a consumption tax improves an intensity standard s efficiency may prevent leakage and may be efficient comparing intensity standards to output based updating shows that the latter dominates if updating is sufficiently flexible

the market impact and the cost of environmental policy evidence from the swedish green car rebate we quantify the effects of the swedish gcr a program to reduce oil dependence and greenhouse gas emissions in the automobile industry we find the gcr to increase the market shares of green cars and its cost to be 109 tonco2 saved thus 5 times the price of an emission permit since the main green cars in sweden are ffvs flexible fuel vehicles which can switch between petrol gasoline and ethanol we also account for fuel choice which increases the cost of the program finally we show that consumers would have purchased ffvs regardless of the rebate provided by the gcr

the impact of public scrutiny on corporate philanthropy this paper proposes that a corporation s vulnerability to public scrutiny drives its corporate giving the hypothesis that companies donate for strategic motives is tested against the alternative that they do so for altruistic reasons court cases and news articles were selected as proxies for public scrutiny macroeconomic variables were used to gauge the level of public charitable need and test for altruism through examining the philanthropic behavior of 40 fortune 500 companies over 7 years this paper finds that companies are strategic and altruistic in their giving

us regional income convergence a spatial econometric perspective rey s j and montouri b d 1999 us regional income convergence a spatial econometric perspective reg studies 33 143 156 this study reconsiders the question of us regional economic income convergence from a spatial econometric perspective recently developed methods of exploratory spatial data analysis provide new insights on the geographical dynamics of us regional income growth patterns over the 1929 94 period strong patterns of both global and local spatial autocorrelation are found throughout the study period and the magnitude of global spatial autocorrelation is also found to exhibit strong temporal co movement with regional income dispersion a spatial econometric analysis of the familiar baumol specification reveals strong evidence of misspecification due to ignored spatial error dependence because of this dependence shocks originating in one state can spillover into surrounding states potentially complicating the transitional dynamics of the convergence process rey s j et montouri

pricing for the clean air evidence from chinese housing market abstract air pollution is widely believed to cause healthy risks and influence nations economic dimensions this paper investigates the impact of air pollution on housing prices in china s 286 prefectural level cities during 2005 2013 to address the endogeneity problem of pm2 5 concentrations in our regression we propose an instrument variable strategy based on ventilation coefficient the estimation results suggest that a 10 increase in pm2 5 concentrations causes a 2 4 reduction in local housing prices air pollution also hinders the progress of urbanization limits cities human capital formation and changes people s expectations of housing prices that we interpret as three potential mechanisms behind our main findings

the long term effect of renewable electricity on employment in the united kingdom abstract assessment of the employment impact of renewable electricity technologies is generally implemented through either complex and data intensive methods such as computable general equilibrium models or simplistic approaches normally focused on specific energy generation technologies such as employment factors in contrast this article proposes a transparent and easily reproducible econometric methodology based on the vector error correction model that uses aggregated and widely available data the model is applied to the power generation sector in the united kingdom using annual data from 1990 onwards and provides evidence that the long term employment impact of renewable technologies is much higher than the impact arising from deploying nuclear or natural gas technologies the impulse response function analysis indicates that a permanent 1 gigawatt hours increase in annual electricity supply generated by renewable technologies creates 3 5 jobs in the long term period finally this study derives the implications of the findings in the context of decarbonisation scenarios for the power sector in the united kingdom and assesses the extent to which decarbonisation pathways based on renewable electricity contribute to stimulating employment in the generation sector

productivity scale economies and technical change reconsidered recently several writers have presented theoretical arguments and empirical evidence that suggests that an electric utility s long run productivity growth rate can be decomposed into a variety of factors for example gollop and roberts 12 decompose a utility s total factor productivity growth rate into three distinct components 1 technical change 2 a scale effect and 3 an environmental regulatory factor results for the 1970s indicate that declining rates of technical change and output growth coupled with increased regulatory intensity lead to a noticeable decline in the firm s long run productivity growth rate similarly nelson and wohar 15 examine the impact of technical change scale economies and rate of return regulation on an electric utility s longrun productivity growth rate evidence suggests that the technical change and scale components behaved in a manner similar to the gollop and roberts 12 findings the evidence concerning the impact of the regulatory factor was less convincing due to the difficulty in obtaining reliable estimates of the regulatory constraint parameter a common characteristic of this literature is that the firms under investigation are assumed to employ all inputs at their long run cost minimizing levels as such the productivity decomposition model is primarily concerned with distinguishing between shifts in the production function versus movements along the production structure according to caves christensen and swanson 5 a violation of the long run equilibrium assumption adds an equally important factor to the decomposition of productivity growth specifically the movement toward or away from longrun equilibrium as a consequence researchers must further distinguish between long run and short run productivity growth estimates 2 in a recent article 9 daly and rao illustrate theoretically and empirically using a long run cost function and data pertaining to ontario hydro that a firm s long run productivity growth rate can be decomposed into 1 technical change 2 non constant returns to scale and 3 a capacity

voluntary environmental agreements good or bad news for environmental protection abstract there has been growing interest in the use of voluntary agreements vas as an environmental policy tool this article uses a simple model to determine whether vas are likely to lead to efficient environmental protection we consider cases where polluters are induced to participate either by a background threat of mandatory controls the stick approach or by cost sharing subsidies the carrot approach the results suggest that the overall impact on environmental quality could be positive or negative depending on a number of factors including the allocation of bargaining power the magnitude of the background threat and the social cost of funds