Shadow Prices of SO2 Abatements for Regions in China
Agricultural and Resources Economics, Vol. 5, No. 2, pp. 59-78, 2008
20 Pages Posted: 30 Apr 2012 Last revised: 1 May 2012
Date Written: 2008
We use the linear programming approach to compute the overall macroeconomic performance and shadow prices of SO2 emission abatements for thirty regions in China during the 1996-2003 period. Our major findings are as follows: On average, the east area is the most efficient and the central area is the most inefficient during these eight years. The average efficiency of those regions with serious acid rain is higher than the others. Shadow price in the west area is the highest, but it is the lowest in the central area. Shadow prices of the regions with serious acid rain are significantly lower than others, implying that the Chinese government should improve the SO2 emission abatement problem in these regions.
Keywords: shadow price, SO2 abatements, output distance function, undesirable output
JEL Classification: Q53
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