Plant level productivity, efficiency, and environmental performance of the container glass industry

This paper presents a methodology and empirical results based on the Malmquist productivity index. We measure productivity while treating pollution as an undesirable output. Our estimates show that technical change has contributed to productivity and environmental performance growth in the container glass industry, an energy and pollution intensive sector. Changes in inter-plant efficiency over time have made this productivity growth more rapid than otherwise would have occurred with the underlying technical change. The efficiency estimates show that there are both opportunities to improve productivity and reduce pollution in this industry, as well as productivity losses associated with the emissions control. The shadow prices for NOx, the undesirable output we analyze, is quite high compared to other regulated sectors.