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Udo Ebert
''Extending the cost function: A simple method of modeling environmental regulation''
( 2006, Vol. 17 No.6 )
The paper shows that a variety of different scenarios in environmental economics can be modeled by one abstract concept, an extended cost function, which takes into account a firm's technological and regulatory constraints. It satisfies the usual properties of a cost function and reasonable properties with respect to the regulatory parameter. An extended cost function represents a simple unified approach which does not depend on the specific form of regulation and the way emissions are modeled.
JEL: Q2 - Renewable Resources and Conservation: General
H3 - Fiscal Policies and Behavior of Economic Agents: General
Manuscript Received : Nov 24 2006 Manuscript Accepted : Nov 28 2006

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