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A computable market equilibrium model with markets for transferable discharge permits
Author(s) -
Shortle James S.,
Willett Keith
Publication year - 1987
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090080402
Subject(s) - key (lock) , computable general equilibrium , commodity , dual (grammatical number) , mathematical optimization , production (economics) , economics , computer science , linear programming , mathematical economics , competitive equilibrium , microeconomics , econometrics , mathematics , art , market economy , computer security , literature
Abstract This paper presents a mathematical programming model for numerically analyzing the impacts of a transferable discharge permit (TDP) system on resource allocation and the distribution of income in a competitive equilibrium setting. Key assumptions of the model are linear household commodity demands, Leontief production functions requiring both primary and produced factors, fixed primary factor supplies and linear pollution dispersion processes. A basic model is presented with discussion of how it may be modified to examine alternative TDP configurations. In addition, there is also a discussion of relationships between key primal and dual variables and of issues involved in actual numerical implementation of the model.