The purpose of this paper is to develop models with and without emissions trading and to compare industry profits under the two regimes. The model in which emissions trading is permitted is a nonparametric industry frontier model in the spirit of Fare, Grosskopf and Li (1992). It is relative to...

This paper critiques a recent attempt to model pollution prevention using data envelopment analysis (DEA). We contribute an alternative model which explicitly models joint provision of desirable and undesirable outputs (a la Shephard and Fare (1974)), using weak disposability of output. We also...