DERIVATION OF SHADOW PRICES FOR UNDESIRABLE OUTPUTS - A DISTANCE FUNCTION-APPROACH

Authors
FARE R GROSSKOPF S LOVELL CAK YAISAWARNG S
Citation
R. Fare et al., DERIVATION OF SHADOW PRICES FOR UNDESIRABLE OUTPUTS - A DISTANCE FUNCTION-APPROACH, Review of economics and statistics, 75(2), 1993, pp. 374-380
Citations number
12
Categorie Soggetti
Social Sciences, Mathematical Methods",Economics
Journal title
Review of economics and statistics → ACNP
ISSN journal
00346535
Volume
75
Issue
2
Year of publication
1993
Pages
374 - 380
Database
ISI
SICI code
0034-6535(1993)75:2<374:DOSPFU>2.0.ZU;2-P
Abstract
Many production activities generate undesirable byproducts in conjunct ion with the desirable outputs they produce. Pittman (1983) showed how to adjust productivity calculations, and Fare et al. (1989) showed ho w to adjust efficiency measures, in the presence of undesirable output s. Here we show how to estimate output distance functions as frontiers in order to generate shadow values of the undesirable outputs that ar e required to make both types of adjustment. An empirical application is provided.