Efficient scale of the pollution-abating firm: comment

In a recent issue of Land Economics, Kohn (1988) used a simple general equilibrium model to analyze the efficient scale of output for perfectly competitive firms whose pollution has a negative effect on another industry. Under Kohn's definition of returns to scale, increasing returns in abateme...

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Veröffentlicht in:Land economics 1989-11, Vol.65 (4), p.413-416
1. Verfasser: Harford, J.D. (Cleveland State University, Cleveland, OH)
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description In a recent issue of Land Economics, Kohn (1988) used a simple general equilibrium model to analyze the efficient scale of output for perfectly competitive firms whose pollution has a negative effect on another industry. Under Kohn's definition of returns to scale, increasing returns in abatement mean that increasing the gross pollution alone will increase the fraction of pollution eliminated. However, it can be shown that his situation leads to the untenable conclusion that the total costs of abatement are a negative function of the volume of pollution treated, ceteris paribus. Further, it appears that many processes aimed at reducing the damages caused by a given concentration of ambient pollution have similar characteristics to those designed to reduce the amount of pollutants escaping into the environment in the first place. In a reply, Kohn agrees that Harford is correct in faulting the eclectic classification of abatement functions in Kohn's study.
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However, it can be shown that his situation leads to the untenable conclusion that the total costs of abatement are a negative function of the volume of pollution treated, ceteris paribus. Further, it appears that many processes aimed at reducing the damages caused by a given concentration of ambient pollution have similar characteristics to those designed to reduce the amount of pollutants escaping into the environment in the first place. In a reply, Kohn agrees that Harford is correct in faulting the eclectic classification of abatement functions in Kohn's study.</abstract><cop>Madison</cop><pub>University of Wisconsin Press</pub><doi>10.2307/3146809</doi><tpages>4</tpages></addata></record>
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subjects Abatement
ANALISIS DE COSTOS
ANALYSE DES COUTS
Comment and Reply
Constant returns to scale
CONTAMINACION
COST ANALYSIS
Cost functions
ECONOMIA
ECONOMICS
ECONOMIE
ECONOMIES OF SCALE
Environmental pollution
Increasing returns to scale
Industry
Input output
Land economics
Mathematical functions
Mathematical models
MODELE
MODELOS
Pollutant emissions
POLLUTION
Pollution control
Production costs
Production functions
RETURNS
Studies
title Efficient scale of the pollution-abating firm: comment
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