Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Jul, 1978, Volume 46, Issue 4

Examination of Environmental Policies Using Production and Pollution Microparameter Distributions<739:EOEPUP>2.0.CO;2-0
p. 739-760

David Zilberman, Eithan Hochman

The existence of pollution externalities calls for government intervention in developing policy measures that will improve social welfare. This paper suggests a method to predict and compare the short-run aggregate output, pollution, and labor input of a competitive industry facing various environmental policies. Assuming that the choice between alternative production technologies can only take place prior to the investment decision, the labor output ratios and the pollution output ratios are fixed in the short run but vary among plants; their distribution is the information used in the aggregation procedure. The performance of different environmental policies--taxes and standards--is examined and compared.

Log In To View Full Content

Journal News