Tag: R22

A THEORETICAL ANALYSIS OF COSTS, WASTE TREATMENT, POLLUTION IN THE GANGES, AND LEATHER PRODUCTION BY TANNERIES IN KANPUR, INDIA

Amitrajeet A. BATABYAL

Arthur J. Gosnell Professor of Economics, Departments of Economics and Sustainability, Rochester Institute of Technology, Rochester, NY 14623-5604, USA

aabgsh@rit.edu

Seung Jick YOO

Corresponding Author, Professor, Sookmyung Women’s University, Seoul, Republic of Korea

sjyoo@sookmyung.ac.kr

Abstract

We theoretically analyze the interaction between two representative and real tanneries, denoted by  and  that are located on the same bank of the Ganges River in Kanpur, India. Tannery  is situated upstream from tannery  Both tanneries produce leather and leather production by tannery  also gives rise to chemical waste that adversely affects the cost incurred by tannery  in producing leather. In this setting, we perform four tasks. First, we determine the amount of chemical waste and the leather produced by tanneries  and  in a competitive equilibrium. Second, we explain why this competitive equilibrium is inefficient from a societal standpoint. Third, we ascertain the socially optimal amount of leather produced by the two tanneries. Finally, we illustrate the working of our theoretical model with a specific example in which we use explicit functional forms and numbers.

Keywords: Ganges River, Leather Production, Tannery, Waste Treatment, Water Pollution

JEL classification: R11, R22, R32, Q52, Q53

 pp. 47-53

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