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| HAL : halshs-00261523, version 1 |
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| Using ex post data to estimate the hurdle rate of abatement investments - an application to sulfur emissions from the Swedish pulp and paper industry and energy sector |
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| Åsa Löfgren 1Katrin Millock 2, 3 |
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| (2008-03) |
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| We propose a method for estimating hurdle rates for firms' investments in pollution abatement technology, using ex post data. The method is based on a structural option value model where the future price of polluting fuel is the major source of uncertainty facing the firm. The econometric procedure is illustrated using a panel of firms from the Swedish pulp and paper industry, and the energy and heating sector from 2000 to 2003. The results indicate a hurdle rate of investment of 2.9 in the pulp and paper industry and 3.4 in the energy and heating sector. |
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| 1 : | Göteborg University |
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Department of Economics |
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| 2 : | Centre d'économie de la Sorbonne (CES) |
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CNRS : UMR8174 – Université Paris I - Panthéon Sorbonne |
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| 3 : | Ecole d'Économie de Paris - Paris School of Economics (EEP-PSE) |
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Ecole d'Économie de Paris |
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| 4 : | LERNA-INRA |
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Toulouse School of Economics |
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| 5 : | INRA (LERNA) |
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INRA – Université des Sciences Sociales - Toulouse I |
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| EUREQua |
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| Discipline | : | Humanities and Social Sciences/Economy and finances Humanities and Social Sciences/Environmental studies |
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| Option value – fuel price uncertainty – investment decision – pollution abatement – panel data – pulp and paper industry – energy and heating sector. |
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| Liste des fichiers attachés à ce document : | |||||
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| halshs-00261523, version 1 | |
| http://halshs.archives-ouvertes.fr/halshs-00261523 | |
| oai:halshs.archives-ouvertes.fr:halshs-00261523 | |
| Contributeur : Lucie Label | |
| Submitted on : Friday, 7 March 2008 12:16:53 | |
| Updated on : Monday, 10 May 2010 11:55:02 | |
