On the pricing of undesirable state-contingent outputs

Abstract

This paper adapts the models of Frisch (1965) and Murty and Russell (2006) on the modelling of undesirable outputs to a state-contingent setting with a specific emphasis on agricultural production technologies. The Chambers and Färe (2008) approach to calculating shadow prices for DEA technologies is extended to encompass state-contingent production problems. These contributions are implemented empirically using a dataset obtained from a survey of Catalan farmers. © 2014 Oxford University Press and Foundation for the European Review of Agricultural Economics 2014.