The Measurement of Environmental Economic Inefficiency with Pollution-Generating Technologies

Juan Aparicio , Magdalena Kapelko , Jose L. Zofio


This study introduces the measurement of environmental inefficiency from an economic perspective. We develop our proposal using the latest by-production models that consider two separate and parallel technologies: a standard technology generating good outputs, and a polluting technology for the by-production of bad outputs. While research into environmental inefficiency incorporating undesirable or bad outputs from a technological perspective is well established, no significant attempts have been made to extend it to the economic sphere. Based on the definition of net profits, we develop an economic inefficiency measure that accounts for suboptimal behavior in the form of foregone private revenue and environmental cost excess. We show that economic inefficiency can be consistently decomposed according to technical and allocative criteria, considering the two separate technologies and market prices, respectively. We illustrate the empirical implementation of our approach using a dataset on agriculture at the level of US states.
Author Juan Aparicio - Miguel Hernández University of Elche (UMH)
Juan Aparicio,,
, Magdalena Kapelko (BM / DoL)
Magdalena Kapelko,,
- Department of Logistics
, Jose L. Zofio - Autonomous University of Madrid (UAM)
Jose L. Zofio,,
Journal seriesResource and Energy Economics, [Resources and Energy Economics], ISSN 0928-7655, e-ISSN 1873-0221, (N/A 100 pkt)
Issue year2020
Publication size in sheets1.4
Article number101185
Keywords in EnglishEnvironmental Economic Inefficiency, Pollution-Generating Technologies, Technical and Allocative Efficiency Measurement, Data Envelopment Analysis, US Agriculture
ASJC Classification2002 Economics and Econometrics
Languageen angielski
LicenseJournal (articles only); author's original; Uznanie Autorstwa (CC-BY); after publication
Aparicio_Kapelko_Zofio_The_Measurement_Of_Environmental_Economic.pdf 1,73 MB
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OSWIAD_Kapelko_M_The_Measurement_of_Environmental_2020.pdf 35,31 KB
Score (nominal)100
Score sourcejournalList
Publication indicators Scopus SNIP (Source Normalised Impact per Paper): 2018 = 1.316; WoS Impact Factor: 2017 = 1.92 (2) - 2017=2.524 (5)
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UwagaThe authors are grateful to the Spanish Ministry for Economy and Competitiveness (Ministerio de Economia, Industriay Competitividad), the State Research Agency (Agencia Estatal de Investigacion), and the European Regional DevelopmentFund (Fondo Europeo de Desarrollo Regional) under grants PID2019-105952GB-I00 and ECO2017-82449-P (AEI/FEDER, UE),as well as the National Science Centre in Poland (grant number 2016/23/B/HS4/03398), for providing financial support forthis article. The calculations of adapted Li test were made at the Wroclaw Centre for Networking and Supercomputing(, grant no. 286.
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* presented citation count is obtained through Internet information analysis and it is close to the number calculated by the Publish or Perish system.