Löfgren, Åsa; Millock, Katrin; Nauges, Céline - Centre d'Économie de la Sorbonne, Université Paris 1 … - 2008
We propose a method for estimating hurdle rates for firms' investments in pollution abatement technology, using ex post data. The method is based on a structural option value model where the future price of polluting fuel is the major source of uncertainty facing the firm. The econometric...