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Trade Restrictiveness and Pollution
Author(s) -
CHAU NANCY H.,
FÄRE ROLF,
GROSSKOPF SHAWNA
Publication year - 2013
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/jpet.12008
Subject(s) - restrictiveness , economics , externality , consumption (sociology) , econometrics , index (typography) , production (economics) , microeconomics , computer science , social science , philosophy , linguistics , sociology , world wide web
This paper proposes a trade restrictiveness indicator that explicitly incorporates environmental externalities. The index employs directional distance functions and uses indicators (i.e., differences rather than ratios) modified to account for and evaluate efficiency changes in the face of simultaneous and multidimensional trade and environmental policy reforms. The index is made up of two components, one for production and one for consumption. Our overall trade restrictiveness indicator is accordingly the difference of the two. The properties of the indicator are developed and discussed together with its estimation.