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

A. Ding, S. Managi

Research output: Chapter in Book/Report/Conference proceedingConference contribution

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.

Original languageEnglish
Title of host publicationSustainable Development and Planning IV
PublisherWITPress
Pages581-589
Number of pages9
Volume120
ISBN (Print)9781845641818
DOIs
Publication statusPublished - 2009 Jan 1
Event4th International Conference on Sustainable Development and Planning, Sustainable Development 2009 - , Cyprus
Duration: 2009 May 132009 May 15

Other

Other4th International Conference on Sustainable Development and Planning, Sustainable Development 2009
CountryCyprus
Period09/5/1309/5/15

Keywords

  • China
  • Environmental efficiency
  • Environmental performance
  • Environmental productivity
  • Markov chain Monte Carlo
  • Pollution abatement

ASJC Scopus subject areas

  • Environmental Science(all)

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  • Cite this

    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 (Vol. 120, pp. 581-589). WITPress. https://doi.org/10.2495/SDP090542