decoupling of industrial energy consumption and co2 emissions in energy intensive industries in scandinavia as methodology the ex post analysis deserves more attention as a device to calibrate energy sector models this paper studies the impact of energy prices and taxes on energy efficiency and carbon emissions of ten industrial sectors in the three scandinavian countries a database with sector specific energy prices and taxes has been established which allows the analysis to take various price reductions and tax exemptions better into account a translog factor demand system estimation for a cross industry pooled model is explored and fixed effects across industries and time is estimated the findings here confirm recent analyses which indicate higher long term elasicities for industries than normally assumed in scandinavian energy sector models with the observations on differences in energy intensities among sectors and countries the findings allow for some optimism as to the opportunities for further decoupling between trends in gross value added carbon emissions and energy consumption

the greenhouse effect damages costs and abatement the buildup of so called greenhouse gases in the atmosphere co2 in particular appears to be having an adverse impact on the global climate this paper briefly reviews current expectations with regard to physical and biological effects their potential costs to society and likely costs of abatement for a worst case scenario it is impossible to assess in economic terms the full range of possible non linear synergistic effects in the most favorable although not necessarily likely case of slow paced climate change however it seems likely that the impacts are within the affordable range at least in the industrialized countries of the world in the third world the notion of affordability is of doubtful relevance making the problem of quantitative evaluation almost impossible we tentatively assess the lower limit of quantifiable climate induced damages at 30 to 35 per ton of co2 equivalent worldwide with the major damages being concentrated in regions most adversely affected by sea level rise the non quantifiable environmental damages are also significant and should by no means be disregarded the costs and benefits of 1 reducing cfc use and 2 reducing fossil fuel consumption as a means of abatement are considered in some detail this strategy has remarkably high indirect benefits in terms of reduced air pollution damage and even direct cost savings to consumers the indirect benefits of reduced air pollution and its associated health and environmental effects from fossil fuel combustion in the industrialized countries range from 20 to 60 per ton of co2 eliminated in addition there is good evidence that modest e g 25 reductions in co2 emissions may be achievable by the u s and by implication for other countries by a combination of increased energy efficiency and restructuring that would permit simultaneous direct economic benefits savings to energy consumers of the order of 50 per ton of co2 saved a higher level of overall emissions reduction possibly approaching 50 could probably be achieved at little or not net cost by taking advantage of these savings we suggest the use of taxes on fossil fuel extraction or a carbon tax as a reasonable way of inducing the structural changes that would be required to achieve significant reduction in energy use and co2 emissions to minimize the economic burden and create a political constituency in support of the approach we suggest the substitution of resource based taxes in general for other types of taxes on labor income real estate or trade that are now the main sources of government revenue while it is conceded that it would be difficult to calculate the optimal tax on extractive resources we do not think this is a necessary prerequisite to policy making in fact we note that the existing tax system has never been optimized according to theoretical principles and is far from optimal by any reasonable criteria

discounting in a world of limited growth this paper explores the consequences fordiscounting of assuming limits to growth one of the main determinants of the discount rate is the rate of economic growth if growth rates decline in the future then the discount rate should not be constant but also decline over time in fact we would then need not a single discount rate but rather a variable discount schedule this would imply higher present values for the distant future the paper analyses how discount rates would vary with different assumptions about the patterns of growth and the pure rate of time preference

are optimal emissions really optimal four critical issues for economists in the greenhouse although the greenhouse effect is by many considered as one of the most serious environmental problems several economic studies of the greenhouse effect most notably nordhaus s dice model suggest that it is optimal to allow the emissions of greenhouse gases ghg to increase by a factor of three over the next century other studies have found that substantial reductions can be justified on economic grounds this paper explores into the reasons for these differences and identifies four partly overlapping crucial issues that have to be dealt with when analysing the economics of the greenhouse effect low probability but catastrophic events cost evaluation methods the choice of discount rate the choice of decision criterion the paper shows that i these aspects are crucial for the policy conclusions drawn from models of the economics of climate change and that ii ethical choices have to be made for each of these issues this fact needs wider recognition since economics is very often perceived as a value neutral tool that can be used to provide policy makers with optimal policies

reconciling sustainability and discounting in cost benefit analysis a methodological proposal abstract the incorporation of the intergenerational equity objective has rendered the traditional cost benefit analysis cba approach obsolete for the evaluation of projects presenting an important number of environmental externalities and for those whose impacts extend throughout a long period of time based on the assumption that applying a discount rate rewards current consumption and therefore that it is only possible to introduce a certain intergenerational equity in a cost benefit analysis in this work we propose an approach to discounting based on a different rationale for tangible and intangible effects we designed two indicators of environmental profitability a the intergenerational transfer amount ita which quantifies in monetary units what the current generation is willing to pass on future generations when an environmental restoration project is carried out and b the critical environmental rate cer measures the implicit environmental profitability these concepts were tested through an empirical case study pertaining to the assessment of an erosion control project in the southeast of spain the results yield traditional profitability indicators that are higher and probably closer to the real values set by the contemporary society the information provided by the environmental profitability indicators proposed renders more transparency to the quantification of the levels of intergenerational equity applied thereby facilitating the difficult reconciliation of the cba technique with the objective of sustainability

an econometric study of co2 emissions energy consumption income and foreign trade in turkey abstract this study attempts to empirically examine the dynamic causal relationships between carbon emissions energy consumption income and foreign trade in the case of turkey using the time series data for the period 1960 2005 this research tests the interrelationship between the variables using the bounds testing to cointegration procedure the bounds test results indicate that there exist two forms of long run relationships between the variables in the case of first form of long run relationship carbon emissions are determined by energy consumption income and foreign trade in the case of second long run relationship income is determined by carbon emissions energy consumption and foreign trade an augmented form of granger causality analysis is conducted amongst the variables the long run relationship of co2 emissions energy consumption income and foreign trade equation is also checked for the parameter stability the empirical results suggest that income is the most significant variable in explaining the carbon emissions in turkey which is followed by energy consumption and foreign trade moreover there exists a stable carbon emissions function the results also provide important policy recommendations

estimating crop specific production technologies in chinese agriculture a generalized maximum entropy approach a generalized maximum entropy approach is adapted to empirically estimate crop specific production technologies in chinese agriculture despite a modest behavioral assumption about equal marginal returns of nonland inputs among crops this method does not require price information which is usually distorted in a centrally planned economy such as china a multi output technology for chinese agriculture is estimated and input allocations for each province are recovered simultaneously the estimated multi output production technology and input allocations imply that china may have greater grain production potentials than previously thought copyright 2001 oxford university press

discounting and distributional considerations in the context of global warming the economics of global warming is reviewed with special emphasis on how the cost depends on the discount rate and on how costs in poor and rich regions are aggregated into a global cost estimate both of these factors depend on the assumptions made concerning the underlying utility and welfare functions it is common to aggregate welfare gains and losses across generations and countries as if the utility of money were constant but it is not if we assume that a e co2 equivalent dlubling implies costs equal to 1 5 of the income in both high and low income countries a pure rate of time preference equal to zero and a utility function which is logarithmic in income then the marginal cost of co2 emissions is estimated at 260 590 usd ton c for a time horizon in the range 300 1000 years an estimate which is large enough to justify significant reductions of co2 emissions on purely economic grounds the estimate is approximately 50 100 times larger than the estimate made by nordhaus in his dice model and the difference is almost completely due to the choice of discount rate and the weight given to the costs in the developing world as well as a more accurate model of the carbon cycle finally the sensitivity of the marginal cost estimate with respect to several parameters is analyzed

technical change inter factor and inter fuel substitution possibilities in pakistan a trans log production function approach abstract energy consumption in pakistan increased significantly over the last two decades primarily due to industrialization in order to meet the growing energy needs the government adopted short term policies by setting up thermal power projects which are more expensive both in terms of fiscal cost and environmental damages as compared to hydro power projects the former has exposed pakistan to international oil price shocks and environmental degradations this study therefore attempts to analyze technical change using trans log production function by employing non energy factors i e capital and labor and energy factors i e petroleum and natural gas to estimate elasticity of substitution the purpose of the study is to provide policy suggestions to the government on how to achieve high economic growth vis a vis improved energy security and environmental sustainability the results reveal that capital energy and labor energy are substitutes thereby suggesting the need for an increased focus on technological advancement and skilled employment generation to conserve energy and reduce co 2 emission a gradual elimination of energy subsidies which will make energy price reflects its true cost is required to further discourage increased energy consumption and promote capital intensive production methods a scenario analysis based on the elasticity of substitution between capital energy and petroleum gas shows the potential of energy conservation and emission mitigation the results further suggest the importance of a diversified energy supply mix characterized by abundant hydro and other renewable energy resources alongside natural gas

a nested ces approach to capital energy substitution abstract this paper uses the nested constant elasticity of substitution ces production function to estimate elasticities of substitution between capital labour energy and materials over the 1971 1976 period around the initial energy crisis elasticities are estimated for each of the two digit sic industries within us manufacturing using more disaggregate four digit sic data the nested ces function makes it possible to distinguish between engineering and economic elasticities of substitution capital and energy are estimated to be slight engineering substitutes and economic complements labour energy and materials are estimated economic substitutes

factor substitution in u s manufacturing does plant size matter we use micro data for 10 412 u s manufacturing plants to estimate the degrees of factor substitution by industry and by plant size we find that 1 capital labor energy and materials are substitutes in production and 2 the degrees of substitution among inputs are quite similar across plant sizes in a majority of industries two important implications of these findings are that 1 small plants are typically as flexible as large plants in factor substitution consequently economic policies such energy conservation policies that result in rising energy prices would not cause negative effects on either large or small u s manufacturing plants and 2 since energy and capital are found to be substitutes the 1973 energy crisis is unlikely to be a significant factor contributing to the post 1973 productivity slowdown

nonparametric tests of cost minimizing behavior a study of indian farms we extend existing nonparametric methods of analyzing production efficiency to allow some inputs to be quasi fixed varian s weak axiom of cost minimization is modified to derive the weak axiom of variable cost minimization the methodology is applied to farm level data from west bengal india which are analyzed for consistency with cost minimizing behavior there is strong evidence against overall cost minimization a result that cannot be rationalized in terms of production uncertainty and risk aversion however violation of either technical efficiency or of variable cost minimization is much less serious this suggests that failure of cost minimization is principally due to imperfections in the markets for capital and land

energy substitution effect on transport sector of pakistan based on trans log production function abstract transport sector because of the growing industrialization and urbanization of pakistan is one of fastest growing sector in terms of output energy consumption and co 2 emission its current performance and future outlook has the potential to leave behind problems related to the global issues of energy security and environmental sustainability the extents to which energy and non energy inputs are substitutable are the core issue in planning and designing of energy policies for this purpose we establish a trans log production function for pakistan transport sector and the input factors capital labor and energy are included output elasticities of each factor and the substitution elasticities between these factors have been estimated and analyzed for the sample period of 1980 2013 the results show higher output elasticity and that all pairs of factor inputs are substitutes because of the higher level of substitution elasticities the results suggest that by allocating more capital in the transport sector the relevant energy saving technology could be promoted thereby realizing the substitution between capital and energy and reduction of co 2 emission as a result it further suggest that by continuous upgrading of the capital substitution between energy and labor can also be achieved and the transition of pakistan transport sector from labor intensive to capital intensive can be realized

the economics of climate change and the theory of discounting this paper confronts the theory of discounting with climate change economics standard discounting would give long term damages a very low present value on the other hand low discount rates would imply more sacrifices for present generations although future generations may be richer and using multiple rates would lead to economic inefficiencies the paper first shows that arguments favouring a low or zero discount rate in general are weak even from an ethical point of view it goes on by considering different arguments in favour of discount rates decreasing over time and by recalling the argument that non reproducible environmental assets should be given a value growing over time through the example of climate change it finally shows that the latter argument not only implies that the costs of damages associated to climate change should not be underestimated but also reinforce the legitimacy of using decreasing discount rates

examining carbon emissions economic growth nexus for india a multivariate cointegration approach abstract the study probes cointegration and causality between carbon emissions and economic growth for india using ardl bounds testing approach complemented by johansen juselius maximum likelihood procedure in a multivariate framework by incorporating energy supply investment and employment for time span 1971 2006 the study fails to establish long run equilibrium relationship and long term causality between carbon emissions and economic growth however there exists a bi directional short run causality between the two hence in the short run any effort to reduce carbon emissions could lead to a fall in the national income this study also establishes unidirectional short run causality running from economic growth to energy supply and energy supply to carbon emissions the absence of causality running from energy supply to economic growth implies that in india energy conservation and energy efficiency measures can be implemented to minimize the wastage of energy across value chain such measures would narrow energy demand supply gap absence of long run causality between carbon emissions and economic growth implies that in the long run focus should be given on harnessing energy from clean sources to curb carbon emissions which would not affect the country s economic growth

tests of restrictions in large demand systems abstract this paper compares some asymptotic tests of linear restrictions using exact results and monte carlo methods in systems which contain the same regressors in each equation it is found that under a variety of conditions a statistic suggested by deaton provides a better approximation to the true distribution in small sample situations than the wald likelihood ratio or lagrange multiplier tests

empirical assessment of energy price policies the case for cross price elasticities abstract evaluations of energy price policies are necessarily based on measures of the substitution of energy and non energy inputs facing a variety of substitution elasticities the central question arises which measure would be appropriate apparently for a long time this question has not been at issue allen s elasticities of substitution aes have been the most used measures in applied production analysis this paper s main contribution is an instructive survey of the origin of substitution measures and of the trinity of empirical substitution elasticities aes cross price elasticities and the morishima elasticities of substitution mes with particular emphasis on their interpretations and the perspectives that will be captured by these measures this survey clarifies why classical cross price elasticities are to be preferred for many practical purposes berndt and wood s rev econom stat 57 1975 259 frequently applied data set of us manufacturing is used to illustrate why assessments of energy price policies would be better based on cross price elasticities like the energy price elasticity of capital rather than on aes or mes

success in maximizing profits and reasons for profit deviation on dairy farms the weak axiom of profit maximization wapm was used to test how successful each of 70 individual new york state dairy farms was in maximizing profits using nine years of data the netput vectors were corrected for technological change using nonparametric indices that do not require the assumption of profit maximization nor any functional form for the underlying technology these technology indices are consistent with the nonparametric assumptions used in the wapm tests the average negative wapm deviation over the 70 farms was 0 20 indicating that on average these farms could have selected available netput vectors that would have increased profits by 20 of total receipts a tobit regression showed that the available characteristics on these farms explained very little of the variability in their abilities to select the best netput vectors yet increased age and additional education increased the ability to select the best netput vector

measuring the energy input substitution and output effects of energy price changes and the implications for the environment abstract previous studies of decomposition of factor inputs have limited their analysis on the estimation of substitution and output effects however this paper develops a two step approach to estimate the substitution and output effects of changes in energy demand resulting from changes in prices and further examines the implications of these effects on co2 emissions using european industrial dataset over the period 1995 2007 in our empirical estimations instead of relying only on isur model like previous studies we introduced a multilevel model which is a more befitting model to our data our analysis covers industry as a whole and for different sector types the primary results emerged from our analysis suggest a strong evidence using the multilevel model generally our results show that production inputs are substitutable we find the substitution and output effects to be negatively related to co2 emissions however the substitution effects dominate from policy perspectives our results suggest that output adjustments may not play a significant role in reducing emissions we find the overall effects of changes in energy demand to be moderate then we argue that increment in energy taxes should be complemented by cleaner factor substitution and sustainable growth to achieve a desirable carbon reduction

decomposing energy demand across briic countries energy plays an important role within the production technology of fast emerging economies such that firms reaction to changes in energy prices provides useful information on factor productivity and factor intensity as well as the likely outcome of energy policy initiatives among other things drawing on duality theory this paper decomposes changes in energy demand into substitution and output effects using annual sector level production data for brazil russia india indonesia and china briic for the period 1995 2009 unlike previous studies this study analyzed the economic properties of the underlying production technology results indicate that changes in energy demand are strongly dominated by substitution effects more importantly an intriguing finding that emerges from our analysis is the role of economies of scale and factor accumulation as opposed to technical progress in giving rise to the growth performance of sampled economies

environment kuznets curve for co2 emissions a cointegration analysis for china abstract this study examines the long run relationship between carbon emissions and energy consumption income and foreign trade in the case of china by employing time series data of 1975 2005 in particular the study aims at testing whether environmental kuznets curve ekc relationship between co 2 emissions and per capita real gdp holds in the long run or not auto regressive distributed lag ardl methodology is employed for empirical analysis a quadratic relationship between income and co 2 emission has been found for the sample period supporting ekc relationship the results of granger causality tests indicate one way causality runs through economic growth to co 2 emissions the results of this study also indicate that the carbon emissions are mainly determined by income and energy consumption in the long run trade has a positive but statistically insignificant impact on co 2 emissions

conflicts between theory and practice in production economics nomic relationships allows multiple theoretical models to explain essentially the same behavior at the same time indirect measurement places great demands on data to test theory for example using parametric tests for profit maximization requires estimating second order curvature parameters to ascertain whether parameters exhibit certain properties it may be difficult to determine second order substitution effects using related price data which in practice are often highly collinear as technical demands placed on data for testing underlying theory increase conflicts between theory and empirical evidence should also be expected to rise

the logic of testing structural change in meat demand a methodological analysis and appraisal in the past two decades the profession has expended valuable resources testing structural change in meat demand with mixed results overlooked to date is a fundamental methodological problem that transcends all methods of testing for structural change in this study a methodological framework is used to show that there is no valid test of structural change because of this result additional criteria from the methodology literature are used to evaluate the literature on structural change in meat demand and to provide suggestions for fertile areas of future research

defining the generational environmental debt abstract assume that we have borrowed the earth from our children and that we one day shall give it back to them and account for what we have done to it then we would have to try to restore the damage we have caused further we would have to offer compensation for the damage we have done that we cannot repair at a lower cost the generational environmental debt ged is a measure of these costs in this paper we define and discuss the concept of ged and calculate ged for emissions of the greenhouse gas co 2 the global ged for co 2 emissions is estimated to 10000 billion us dollars and the swedish ged for co 2 emissions is estimated to 60 billion us dollars

a nonparametric analysis of agricultural technology u s agricultural technology and technical change are analyzed nonparametrically under cost minimization and profit maximization based on annual data for 1948 83 various separability hypotheses concerning the aggregate production function for u s agriculture are investigated the proposed nonparametric approach also provides some insights into the nature of technical change

a nonparametric analysis of variable cost minimization in the united states paper industry nanparametric tests of consistency of data with variable cost minimization returns to scale homotheticity are described and applied to data from the us paper industry results indicate that data from the us paper industry are consistent with the minimization of variable costs increased productivity due to technological improvements or increasing returns to scale and a homothetic production function a method derived from nonparametric estimation for screening hypothesized data sets prior to predictive use with an estimated production function is described

energy consumption carbon emissions and economic growth in china abstract this paper investigates the existence and direction of granger causality between economic growth energy consumption and carbon emissions in china applying a multivariate model of economic growth energy use carbon emissions capital and urban population empirical results for china over the period 1960 2007 suggest a unidirectional granger causality running from gdp to energy consumption and a unidirectional granger causality running from energy consumption to carbon emissions in the long run evidence shows that neither carbon emissions nor energy consumption leads economic growth therefore the government of china can purse conservative energy policy and carbon emissions reduction policy in the long run without impeding economic growth

environmental policy under a non market discount rate abstract this paper looks at pollution emissions when a non market discount rate is used to evaluate environmental policy and policy is subject to continuous review through time it is shown that a non market rate leads to time inconsistent policy future regulators will want not to follow the current regulator s optimal plans even when the current regulator has perfect foresight and there is no uncertainty therefore the discount rate has different effects depending on whether government can commit to future environmental regulation we then show in a simple linear model that when the environmental discount rate is below the market rate pollution is higher under no commitment than under commitment even under no commitment however a lower discount rate leads to lower emissions we argue that the debate might be better framed over prices i e the value of the environment in the future rather than the discount rate this treatment removes the inconsistency problem yet ensures that future generations interests are represented in policy decisions

capital energy substitution evidence from a panel of irish manufacturing firms abstract we use a translog cost function to model production in the irish manufacturing sector over the period from 1991 to 2009 we estimate both own and cross price elasticities and morishima elasticities of substitution between capital labour materials and energy we find that capital and energy are substitutes in the production process across all firms we find that a 1 rise in the price of energy is associated with an increase of 0 04 in the demand for capital the morishima elasticities which reflect the technological substitution potential indicate that a 1 increase in the price of energy causes the capital energy input ratio to increase by 1 5 the demand for capital in energy intensive firms is more responsive to increases in energy prices while it is less responsive in foreign owned firms we also observe a sharp decline in firms responsiveness in the first half of the sample period

energy capital substitution wage flexibility and aggregate output supply abstract this paper analyzes the relationship between factor substitution labor market conditions and aggregate output supply in order to study the transmission mechanism of energy price change to the rest of the economy it shows that the energy capital complementarity vs substitutability issue may turn out to be crucial in shaping the direction of the adjustment of aggregate output supply following energy price changes how crucial it is it is shown to depend on the beliefs of firms regarding the stock of capital on the degree to which labor markets clear and on the wage elasticity of labor supply some empirical evidence is presented about the relationship between energy price changes and output supply

duality the output effect and applied comparative statics except for kako agricultural production studies using cost functions have analyzed technology via allen elasticities technological change parameters and homotheticity tests kako used a transcendental logarithmic translog cost function to decompose empirically changes in derived factor demand into three separate components output level factor substitution effects and technical change kako s work allows further investigation of technical change on derived factor demands however kako s output effect is different from the traditional concept the production analog of the income effect in consumer theory this note outlines a theoretical and econometric approach for measuring the output effect the output effect is important because it presents a more complete picture of factor employment adjustments than do demand elasticities generated from cost functions elasticities generated from cost functions restrict the producer to a given level of output producers however may also adjust output as factor prices change the output effect captures this adjustment this paper demonstrates a method for deriving the output effect from the cost function first the general assumptions and the model are outlined then the cost function is related to the indirect production function and the output effect obtained results are presented for the special case of a homothetic production function the paper concludes with an empirical application to the u s meat products industry

asymmetric substitutability between energy and capital evidence from the manufacturing sectors in 10 oecd countries abstract this paper investigates the substitutability between energy and capital in the manufacturing sectors of ten oecd countries since 1980 by applying a cost function approach that has been widely used to analyze industrial energy demand first we attempt to determine the source of the disagreement in the literature on the substitutability between energy and capital and reach a conclusion regarding the substitutability between energy and capital dividing energy and capital into sub inputs we analyze their substitutability the empirical results indicate that fuel tends to complement capital in most countries whereas electricity and capital are substitutes thus this study confirms that heterogeneity in energy sources is a primary component of the systematic variation in the substitutability between energy and capital second we examine asymmetric substitutability between energy and capital by estimating the morishima elasticity of substitution the estimates of the morishima elasticity of substitution demonstrate that the substitution of energy for capital has dominated the substitution of capital for energy this asymmetric substitutability is natural from the producer perspective because capital costs are much greater than energy costs in most countries these results imply that the adoption of energy saving technologies has not been induced in response to increased energy prices

co2 emissions energy consumption and output in france abstract this paper examines the dynamic causal relationships between pollutant emissions energy consumption and output for france using cointegration and vector error correction modelling techniques we argue that these variables are strongly inter related and therefore their relationship must be examined using an integrated framework the results provide evidence for the existence of a fairly robust long run relationship between these variables for the period 1960 2000 the causality results support the argument that economic growth exerts a causal influence on growth of energy use and growth of pollution in the long run the results also point to a uni directional causality running from growth of energy use to output growth in the short run

are there environmental limits to cost benefit analysis this paper considers the problem areas found in applying cost benefit analysis cba to projects involving environmental costs or benefits this is particularly relevant given recent moves by the uk government to include environmental valuations in cba exercises and in other related appraisal activities following the publication of the pearce report the paper argues that a major problem lies in placing monetary values on non market goods the paper also addresses the problems of i differences between citizen and consumer values ii complexity of ecosystems iii irreversibility and uniqueness and iv intergenerational equity and discounting the extent to which cba is an institution open to capture is also discussed

energy consumption income and carbon emissions in the united states abstract this paper investigates the effect of energy consumption and output on carbon emissions in the united states earlier research focused on testing the existence and or shape of an environmental kuznets curve without taking energy consumption into account we investigate the granger causality relationship between income energy consumption and carbon emissions including labor and gross fixed capital formation in the model we find that income does not granger cause carbon emissions in the us in the long run but energy use does hence income growth by itself may not become a solution to environmental problems

aggregation of data and profit maximization in mexican agriculture nonparametric support for two important hypotheses relevant to econometric model specification is examined results of various nonparametric tests for behavioural objective and aggregation level of mexican agricultural production data are reported the evidence does not refute the hypothesis that producers behave collectively as though they are a price taking profit maximizing firm the empirical results also support exhaustive aggregation of input categories aggregation possibilities among outputs are fewer and are highly sensitive to the rejection criterion