A General Equilibrium Analysis of the Optimal Number of Firms in a Polluting Industry

Kohn, Robert E.

doi:10.2307/135140

Cited by 29 publications

(14 citation statements)

References 4 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The ®ndings may be quite di¨erent if it is the ®rms that are the victims. For example, contrary to the results given here, DeSerpa (1994) shows that victims (®rms from another industry) must not be compensated when pollution is global (see also Schultze and D'Arge 1974;or Kohn 1985), but must be compensated when it is local.…”

Section: Discussioncontrasting

confidence: 83%

The insufficiency of Pigouvian taxes in a spatial general equilibrium model

Uimonen¹

2001

The Annals of Regional Science

View full text Add to dashboard Cite

The paper considers, in a spatial general equilibrium setting, the pollution externality problem caused by a competitive industry. It is shown that the pollution control instrument supporting the optimum is a two-part Pigouvian tax±emission rights scheme in which the polluter pays only for the emissions which exceed its initial emission rights. The optimal level of the emission rights depends on the nature of pollution. In the global pollution case they are zero, whereas in the local pollution case they are equal to the ®rm's emissions at the optimum. In general, the optimal initial emission rights are between these values, but they may also be negative. In the latter case the ®rm pays for a greater amount of emissions than it emits. The emission tax proceeds, if there are any, must be distributed to the victims (households) as compensation.

show abstract

Section: Discussioncontrasting

confidence: 83%

The insufficiency of Pigouvian taxes in a spatial general equilibrium model

Uimonen¹

2001

The Annals of Regional Science

View full text Add to dashboard Cite

show abstract

“…In Kohn (1985) the firm is a passive variable in a general equilibrium model. The analyst solves for the number of firms that will assure a competitive equilibrium, but only labour and capital are the resources that are specified in the economy.…”

Section: The Firm In a Generalmentioning

confidence: 99%

“…If the production function exhibited constant returns to scale, the number of firms in each industry would be indeterminate. It is derived from a general equilibrium model, but the model's treatment of firms in the economy differs from the treatment in Kohn (1985). Therefore, given the treatment of the firm and the form of the production function chosen to assure the existence of a competitive equilibrium, Kohn's result follows.…”

Section: The Firm In a Generalmentioning

confidence: 99%

General Equilibrium Modelling of Industries with Production Externalities

Mestelman¹

1986

The Canadian Journal of Economics

View full text Add to dashboard Cite

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.Abstract. It has been argued that when the negative effects of a production externality are internalized with the use of a Pigouvian corrective tax, the optimal output of the representative firm in the polluting industry will be the same as the status quo output if the firm's production function is homothetic. Only if a non-homothetic production function is considered can situations occur in which the optimal output will differ from the initial output. This result is conditioned by a particular treatment of the firm in the general equilibrium model. An alternative treatment is presented which yields optimal output different from status quo output when the firm's production function is homothetic.Modelisation des industries en equilibre general quand des effets externes existent dans le processus de production. On a suggere que, quand les effets negatifs d'une externalite dans le processus de production sont pour ainsi dire internalises via l'imposition d'une taxe correctrice 'a la Pigou, le niveau optimal de production d'une firme-type dans une industrie generatrice de pollution est le meme que celui qui prevaudrait sans intervention si la fonction de production de la firme est homothetique. C'est seulement quand la fonction de production n'est pas homothetique que le niveau d'output optimal differerait du niveau initial. I1 appert que ce resultat depend d'un type de traitement particulier de la firme dans le cadre du modele d'equilibre general. Un traitement different est suggere pour lequel les niveaux de production optimal et initial sont differents meme quand la fonction de production de la firme est homoth6tique.

show abstract

“…Fourth, there exists a large body of literature that has investigated the distortionary effects of environmental regulations on entry-exit behavior in a variety of setups (e.g., Carlton and Loury, 1980;Spulber, 1985;Kohn, 1985Kohn, , 1994Collinge and Oates, 1982;McKitrick and Collinge, 2000;Pezzey, 2003). However, we are not aware of studies of the entry-exit problem that have explicitly considered heterogeneity of firms.…”

Section: Introductionmentioning

confidence: 99%

“…But this occurs because firms need to be more profitable to make up for the cost of pollution to stay active in the market. Now substitute (ZCP) and (24), respectively, into (21) and (26). We then see that:…”

mentioning

confidence: 99%

Emissions Trading, Firm Heterogeneity, and Intra-industry Reallocations in the Long Run

Konishi

Tarui

2015

Journal of the Association of Environmental and Resource Econom

View full text Add to dashboard Cite

Design of environmental regulation has substantial implications for size distribution and mass of firms within and across industries in the long run. In a general equilibrium model that accounts for endogenous entry and exit of heterogeneous firms, the welfare impacts of emissions trading are analytically decomposed into the effects on economy-wide income, mass of firms, size distribution, markups, and factor prices. Distortionary impacts on size distribution and permit price depend on the conditionality of permit distribution, interactions between changes in entry-exit conditions and in aggregate accounting conditions, the factor intensity of entry, and coverage of non-pollution-intensive sectors in emissions trading.

show abstract

A General Equilibrium Analysis of the Optimal Number of Firms in a Polluting Industry

Cited by 29 publications

References 4 publications

The insufficiency of Pigouvian taxes in a spatial general equilibrium model

The insufficiency of Pigouvian taxes in a spatial general equilibrium model

General Equilibrium Modelling of Industries with Production Externalities

Emissions Trading, Firm Heterogeneity, and Intra-industry Reallocations in the Long Run

Contact Info

Product

Resources

About