Francisco J. André

• Ph D in Econmics
• Professor (Associate) at Complutense University of Madrid

Economic growth in Spain has largely relied on certain water-intensive sectors including construction, leisure, and agriculture; but considerable heterogeneity is found across the country’s regions, both in terms of water stress and economic structure. Using Data Envelopment Analysis and a panel Tobit model, we analyze the determinants of water eff...

Water scarcity is prone to be an important source of stress and conflict in the coming future. In the case of Spain, economic growth has relied, to a large extent, on some water-intensive sectors, such as construction, leisure, and agriculture. Spanish regions display important heterogeneities both in terms of water stress and economic structure. I...

Efficiency is a fundamental element of the transition towards a sustainable use of natural resources among which water has a prominent role. Spain is among the European countries facing considerable water shortage problems, particularly within its southern regions. The current paper introduces an efficiency evaluation model based on Data Envelopmen...

We consider an endogenous learning-by-doing process where countries can invest in research that reduces the systematic uncertainty about climate change damages. We analyse a coalition model in which countries decide whether to join a treaty and then choose their level of research and abatement. Countries can cooperate on research and abatement or o...

Air pollution is one of the most severe environmental problems that Mexico is currently facing. The objective of this paper is to quantify the most relevant socioeconomic driving forces behind air polluting emissions and, more specifically, 7 local pollutants in Mexico. We do so in a multilevel version of the Stochastic Impacts by Regression on Pop...

This paper studies the visibility, environmental sustainability practices, and public recognition of Costa Rican organizations participating in the Carbon Neutrality (cn) Program. Through a review of Costa Rican online newspapers, we conclude that the three main actions performed by cn firms are the offsetting of carbon emissions, the replacement o...

Voluntary Carbon Neutral (CN) programs promote the reduction of Greenhouse Gas emissions of participants. The main objective of this article is to review the literature about firms' behavior in connection to CN programs, paying particular attention to the adoption decision and the firms' strategies to meet the CN requirements. As an additional aim,...

This study investigates the determinants of coffee prices received by growers in Costa Rica, paying attention to the impact of environmental, regional, quality, and international aspects in a panel data set for the period 2008–2016. We identify three groups of variables that affect domestic coffee prices. Some of them are external to the control of...

Voluntary environmental and social certifications represent a channel by which firms can contribute to sustainable development. Using qualitative and quantitative methods, we explore the motivations and obstacles that Costa Rican companies face when adopting Carbon Neutral (CN) and Fairtrade (FT) certifications. CN is a domestic certification aimed...

This article analyzes the willingness to pay of Costa Rican consumers for three environmental certifications in the coffee market, namely, Carbon Neutral, Fairtrade, and ISO 14001. A face-to-face survey was applied to 1191 Costa Rican inhabitants. The results show that Costa Rican consumers are willing to pay price premiums around 30% for all the c...

The effectiveness of voluntary environmental programs and certifications to render social and private benefits depends on how aware consumers are, so that they can consider such initiatives when making their decisions. Consumers’ awareness has been mostly addressed in developed countries, although the benefits of companies’ environmental actions al...

This article focuses on the strategic behavior of firms in the output and the emissions markets in the presence of market power. We consider the existence of a dominant firm in the permit market and different structures in the output market, including Cournot and two versions of the Stackelberg model, depending on whether the permit dominant firm i...

We propose addressing an organization’s adoption of an environmental certification as a multicriteria problem considering environmental sustainability as well as economic and strategic aspects. Our methodological approach uses the Analytical Hierarchy Process (AHP), which we use in an empirical application to analyze the adoption decision of severa...

Cap-and-trade (CAT) programs are nowadays a common tool used by authorities to regulate polluting emissions and tackle environmental problems such as Climate Change. In this chapter, we analyze the implications of firm’s strategic behavior in product and emission permit markets for the success of these policies. We survey the related literature foc...

We study the efficiency of the uniform auction as an allocation mechanism for emission permits among polluting firms. In our model, firms have private information about their abatement costs, which differ across firms and across units, and bidders’ demands are linear. We show that there is a continuum of interior Bayesian Nash equilibria, and only...

In this paper we study the relationship between market power in emission permit markets and endogenous technology adoption. We find that the initial distribution of permits, in particular, the amount of permits initially given to the dominant firm, is crucial in determining over- or under-investment in relation to the benchmark model without market...

Prior research has shown that environmental policy can create scarcity rents. We analyse this phenomenon in the framework of a duopoly that faces a carbon price, considering both Cournot and Stackelberg competition. We identify the different sources of scarcity rents, which we classify in 'output' and 'grandfathering' scarcity rents. The former dep...

We analyze emission permit auctions in a framework in which a dominant firm enjoys market power both in the auction and in the secondary market while its competitor behaves in a competitive way. We obtain linear equilibrium bidding strategies for both firms and a unique equilibrium of the auction, which is optimal ex-post for the dominant firm. Und...

Prior research has shown, on the one hand, that firms subject to a cap-and-trade system can enjoy scarcity rents and, on the other hand, that cost effectiveness in a competitive emission permit market could be affected by tacit collusion and price manipulation when the corresponding polluting product market is oligopolistic. It has also been argued...

We compare auctioning and grandfathering as allocation mechanisms of emission permits when there is a secondary market with market power and the firms have private information. Based on real-life cases such as the EU ETS, we consider a multi-unit, multi-bid uniform auction, modelled as a Bayesian game of incomplete information. At the auction each...

This paper provides a new reading of a classical economic relation: the short-run Phillips curve. Our point is that, when dealing with inflation and unemployment, policy-making can be understood as a multicriteria decision-making problem. Hence, we use so-called multiobjective programming in connection with a computable general equilibrium (CGE) mo...

While fossil energy dependency has declined and energy supply has grown in the postwar world economy, future resource scarcity could cast its shadow on world economic growth soon if energy markets are forward looking. We develop an endogenous growth model that reconciles the current aggregate trends in energy use and productivity growth with the in...

En este artículo se analiza la evolución de las energías renovables y la situación actual de las mismas a nivel internacional. Considerando el nivel mundial y, más específicamente la Unión Europea, se estudia la evolución del mix energético, tomando un horizonte temporal de 40 años para el primero y de 10 años para el segundo. Posteriormente se ana...

We build a principal-agent model to analyze the firm's decision to adopt an environmental management system (EMS) and the EMS type, either informal (I) or standardized (S), such as ISO 14001. Our results are consistent with empirical evidence in several respects. A standardized EMS increases the internal control of the firm at the cost of introduci...

This paper demonstrates a connection between data envelopment analysis (DEA) and a non-interactive elicitation method to estimate the weights of objectives for decision-makers in a multiple attribute approach. This connection gives rise to a modified DEA model that allows us to estimate not only efficiency measures but also preference weights by ra...

As discussed in Chap. 1, the traditional approach to optimal economic policy, although theoretically robust and elegant, is problematic in terms of realism and practical implementability. Our claim is that policy design can be seen as a problem with multiple conflicting objectives, and our proposal is to address policy design combining MCDM techniq...

The aim of this chapter is to determine efficient policies in terms of economic and environmental objectives. Efficiency is a particularly desirable property for policies when taking into account environmental concerns, since, on the one hand, any environmental policy will be better accepted if it does not imply big economic costs and, on the other...

Multiobjective programming and compromise programming are underpinned by the traditional economic view of optimizing agents. In this chapter we explore an alternative view to human behaviour introduced by Simon, based on the idea that people do not aim to maximize any objective, but to satisfice some acceptable achievement levels. This view is cons...

In the research presented throughout this book, a general equilibrium model serves to assess how the economy as a whole will react to any exogenous change. This chapter reviews general equilibrium theory and its transition to applied general equilibrium models. Specifically, we start by offering an overview of the theory of general equilibrium mod...

This chapter underlines some limitations of the traditional approach to public policy making. First, it is troublesome to find an expression for a social welfare function because of information requirements and the technical difficulties associated with the aggregation of preferences. Second, observed policy practice does not appear to be consisten...

To perform a joint analysis of economic and environmental policy (which will be done in the coming chapters), we need to build a model that includes information about both the key economic variables and the environmental impact of economic activity. In this chapter we introduce the standard structure of the CGE model (following the Walrasian tradit...

The set of efficient policies could be too large to serve as a useful guide for real action. In this chapter we use compromise programming (CP) to reduce the number of eligible policies and get more precise policy recommendations than those derived from the efficient set itself. Apart from being efficient, so-called compromise policies have the pro...

In this chapter we present the basic elements of the second analytical tool that we use in our research: multiple criteria decision making (MCDM). It stresses the aspects most related to the design of public policies. MCDM has been designed to overcome two of the key limitations of the traditional approach: (1) the difficulty of characterizing pref...

In this chapter we offer an alternative view to the positive and prescriptive approach that we have taken throughout the rest of the book. Our main purpose is to show that MCDM is also compatible with a traditional normative approach to economic policy making. This traditional view requires identifying a set of members of society, each endowed with...

This book presents a methodological approach for the joint design of economic and environmental policies. The starting point is the observation that, in practice, policy makers do not usually have a well-defined objective, but they are typically concerned about a number of economic and environmental indicators that conflict with each other. In view...

In this paper we propose an analytical approach to obtain so-called efficient policies in terms of environmental and economic objectives. A policy is said to be efficient if any environmental or economic achievement is obtained with the minimum possible detriment to other relevant objectives. We apply this concept obtain the minimum possible enviro...

Designing efficient subsidy policies in a regional economy: a multicriteria decision-making (MCDM)-computable general equilibrium (CGE) approach, Regional Studies. Since policy-makers usually pursue several conflicting objectives, policy-making can be understood as a multicriteria decision problem. Following the methodological proposal by ANDRÉ and...

Macroeconomic policy makers are typically concerned with several indicators of economic performance. We thus propose to tackle the design of macroeconomic policy using Multicriteria Decision Making (MCDM) techniques. More specifically, we employ Multi-objective Programming (MP) to seek so-called efficient policies. The MP approach is combined with...

This paper proposes a non-interactive method to elicit non-linear multi-attribute utility functions which is based on duality results. The idea is to obtain a utility function which is compatible with the observed behavior of decision makers. The paper builds on a previous work by André and Riesgo [A non-interactive method to elicit non-linear mult...

This paper offers new support for the Porter Hypothesis within the context of a quality competition framework. We use a duopoly model of vertical product differentiation in which two firms simultaneously choose to produce either a high (environmentally friendly) quality or low (standard) quality variant of a good, before engaging in price competiti...

A Public Disclosure Program (PDP) is compared to a traditional environmental regulation (exemplified by a tax/subsidy) in a simple dynamic framework. A PDP aims at revealing the environmental record of firms to the public. This information affects its image (goodwill or brand equity), and ultimately its profit. In our model, this impact is endogeno...

The economic policy needs to pay increasingly more attention to the environmental issues, which requires the development of methodologies able to incorporate environmental, as well as macroeconomic, goals in the design of public policies. Starting from this observation, this article proposes a methodology based upon a Simonian satisficing logic mad...

The optimal capacities and locations of a sequence of landfills are studied, and the interactions between these characteristics are considered. Deciding the capacity of a landfill has some spatial implications since it affects the feasible region for the remaining landfills, and some temporal implications because the capacity determines the lifetim...

The optimal capacity and location of a sequence of landfills are studied, and the interactions between both decisions are pointed out. Deciding the capacity of a landfill has some spatial implications, because it effects the feasible region for the rest of the landfills, and some temporal implications because the capacity determines the lifetime of...

Los biocombustibles han experimentado una fuerte expansión gracias a los incentivos otorgados por los poderes públicos y a algunas ventajas como la capacidad para reducir la dependencia energética exterior, la mayor creación de empleos, especialmente en zonas rurales, o el menor impacto ambiental en comparación con los combustibles fósiles. No obst...

This paper analyzes the relationship between Compromise Programming and a close relative called Composite Programming that is based on the use of composite metrics. More specifically, it focuses on the possibility that the results of Compromise Programming are equivalent to those obtained with a particular case of Composite Programming in which a l...

The measures taken in order to fight against the climate change can create conflict when trying to achieve certain economic goals. That is why the design of economic and environmental policies can be understood as a multi-criteria decision problem. In this article we tackle the design of public policies combining multi-criteria techniques and the m...

This work presents an analysis of municipal solid waste management, from an economic perspective. We discuss the market failures caused by generation and management of waste and the main policy instruments to deal with those failures. Specifically, we focus on incentive policies and we list the main advantages and disadvantages of each instrument....

Practical implementation of Multiattribute Utility Theory is limited, partly for the lack of operative methods to elicit the parameters of the Multiattribute Utility Function, particularly when this function is not linear. As a consequence, most studies are restricted to linear specifications, which are easier to estimate and to interpret. We propo...

This paper aims to show how Compromise Programming, linked with some results connecting this approach with classic utility optimization, can become a useful analytical tool for designing and assessing macroeconomic policies. The functioning of the method is illustrated through an application to the Spanish economy. In this way, starting from a Comp...

This paper analyzes the relationship between Compromise Programming and a close relative called Composite Programming that is based on the use of composite metrics. More specifically, it focuses on the possibility that the results of Compromise Programming are equivalent to those obtained with a particular case of Composite Programming in which a l...

Como los gobiernos, al diseñar sus políticas macroeconómicas suelen perseguir distintos objetivos que entran en conflicto entre sí, el diseño de las políticas se puede entender como un problema de decisión multicriteria. Siguiendo la propuesta metodológica de André y Cardenete (2005), en este artículo se usa la programación multiobjetivo en combina...

We study the dynamic impact of recycling through its effect on the production set of the economy and its relationship with natural resources. The contribution of renewable and recyclable resources for sustainability is studied. Although in the short run recycling may alleviate resource scarcity, in the long run it is not enough to compensate for th...

En este trabajo se presenta un análisis de la gestión de residuos sólidos urbanos, desde una perspectiva económica. Se profundiza en los fallos de mercado que produce la generación y la gestión de los residuos y se discuten los principales instrumentos de política que se pueden utilizar para corregir dichos fallos. En particular, se presta especial...

We present a simple dynamic model to get some key insights about the substitution of renewable for nonrenewable resources and the consequences for sustainability. We highlight the role of the elasticity of substitution (technological component) to determine the adjustment of production as a response to scarcity and growing ability of resources (env...

We use a Computable General Equilibrium model to simulate the effects of an Environmental Tax Reform in a regional economy (Andalusia, Spain). The reform involves imposing a tax on CO2 or SO2 emissions and reducing either the Income Tax or the payroll tax of employers to Social Security, and eventually keeping public deficit unchanged. This approac...

The suggestion of obtaining stylized facts on comovement on the basis of prewhitened time series proposed in André et al. (20021. André , F , Pérez , JJ and Martín , R . 2002. Computing white stylized facts on comovement. Economics Letters, 76: 65–71. [CrossRef], [Web of Science ®]View all references) is further developed. First, some examples a...

We propose to model policy making as a multicriteria problem and solve it using suitable multicriteria techniques in connection with some structural economic model to represent optimal policy making and to get useful policy recommendations. By using a multiobjective approach combined with a Computable General Equilibrium model, we propose the conce...

En este trabajo se presenta un análisis de la gestión de residuos sólidos urbanos, desde una perspectiva económica. Se profundiza en los fallos de mercado que produce la generación y la gestión de los residuos y se discuten los principales instrumentos de política que se pueden utilizar para corregir dichos fallos. En particular, se presta especial...

Beginning in the early 1990s, stricter government regulation to protect public health and the environment led to radical changes in waste technology and management in the United States. More stringent regulation induced wholly new technologies, including the lining of landfills, the control of their gas emissions, and changes in the economic scale...

We study the optimal capacity and lifetime of landfills taking into account their sequential nature. Such an optimal capacity is characterized by the so-called Optimal Capacity Condition. Particular versions of this condition are obtained for two alternative settings: first, if all the landfills are to have the same capacity, and second, if each of...

This article shows that, apart from the environment-related externalities linked to waste management and recycling, which are reported in the previous literature, the technological aspect of recycling is an additional source of externalities. The main focus of the paper is the impact that the presence of recycling has on the technological profile o...

A model of endogenous growth and non-renewable resource extraction is presented. Resource owners endogenously determine the extraction path and firms endogenously determine the rate and direction of technological change. We explore under what conditions the short-run dynamics of the model can replicate some important trends of last decades' OECD ex...

Stylized facts concerning the comovements between two economic variables, as measured by the cross-correlation function of the two filtered variables, reflect a mixture of both the existing cross-correlation between the variables and the autocorrelation structure of each of them. The autocorrelation structure, in turn, crucially depends on the filt...

Este trabajo se centra en el aspecto tecnológico del reciclaje, su efecto en el conjunto de producción de la economía y el uso óptimo y sustitución de recursos naturales en producción. Se proporciona un armazón que nos posibilita comparar la relevancia de la utilización de recursos renovables y reciclables para la sustentabilidad. Se propone una ge...

We propose an alternative method of obtaining stylized facts on comovement, based on the cross-correlation function of the prewhitened time series, which only depends on the purely stochastic components of the series and the cross efects between them. This approach has the property of being robust to the filtering procedure and hence to the cicle d...

This article focuses on the technological aspect of recycling, its effect on the production set of the economy and the optimal use and substitution of natural resources in production. We provide a framework that enables us to compare the relevance of using renewable resources and recyclable resources for sustainability. A generalization of the trad...

Given that landfills are depletable and replaceable resources, the right approach, when dealing with landfill management, is that of designing an optimal sequence of landfills rather than designing every single landfill separately. In this paper, we use Optimal Control models, with mixed elements of both continuous-and discrete-time problems, to de...

A theoretical model is presented in order to study the optimal combination of natural resources, used as inputs, taking into account their natural growth ability and the technical possibilities of input substitution. The model enables us to consider renewable resources, nonrenewable, or both. The relative use of resources evolves through time accor...

We propose an alternative method of obtaining stylized facts on comovement, based on the cross-correlation function of the prewhitened time series, which only depends on the purely stochastic components of the series and the cross effects between them. This approach has the property of being robust to the filtering procedure and hence to the defini...

A model of endogenous growth and non-renewable resource extraction is presented. Resource owners endogenously determine the extraction path and firms endogenously determine the rate and direction of technological change. We explore under what conditions the short-run dynamics of the model can replicate the following main trends in the OECD over the...

In this paper we propose an analytical approach to obtain so-called efficient policies in terms of environmental and economic objectives. A policy is said to be efficient if any environmental or economic achievement is obtained with the minimum possible detriment to other relevant objectives. We apply this concept obtain the minimum possible enviro...