Assessment on the effect of pollution abatement on environmental efficiency with Markov chain Monte Carlo simulation

Ding, A. & Managi, S. (2009) Assessment on the effect of pollution abatement on environmental efficiency with Markov chain Monte Carlo simulation. In Sustainable Development and Planning IV, pp. 581-589.

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Abstract

Both environmental economists and policy makers have shown a great deal of interest in the effect of pollution abatement on environmental efficiency. In line with the modern resources available, however, no contribution is brought to the environmental economics field with the Markov chain Monte Carlo (MCMC) application, which enables simulation from a distribution of a Markov chain and simulating from the chain until it approaches equilibrium. The probability density functions gained prominence with the advantages over classical statistical methods in its simultaneous inference and incorporation of any prior information on all model parameters. This paper concentrated on this point with the application of MCMC to the database of China, the largest developing country with rapid economic growth and serious environmental pollution in recent years. The variables cover the economic output and pollution abatement cost from the year 1992 to 2003. We test the causal direction between pollution abatement cost and environmental efficiency with MCMC simulation. We found that the pollution abatement cost causes an increase in environmental efficiency through the algorithm application, which makes it conceivable that the environmental policy makers should make more substantial measures to reduce pollution in the near future.

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ID Code: 75369
Item Type: Conference Paper
Refereed: Yes
Additional Information: The fulltext is free from the WIT website (see 'View at Publisher' link above)provided you register for an account.
Keywords: China; Environmental efficiency; Environmental performance; Environmental productivity; Markov chain Monte Carlo; Pollution abatement
DOI: 10.2495/SDP090542
ISBN: 9781845641818
ISSN: 1743-3541
Subjects: Australian and New Zealand Standard Research Classification > ECONOMICS (140000) > APPLIED ECONOMICS (140200)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Economics & Finance
Copyright Owner: WIT Press
Deposited On: 21 Aug 2014 00:58
Last Modified: 22 Aug 2014 01:51

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