The Microeconomic Analysis of Pollution

Abstract

Almost all of the analysis discussed in this chapter will be what is known as partial analysis. It has long been the method of economists, not least in the general area of microeconomics, to identify particular aspects of an economy for intensive study. Although such an approach lends itself to precise formulation in both verbal and mathematical languages, there is an ever-present danger of sacrificing truth for elegance. Since the main purpose of this book is to survey the existing economic theory that is of relevance to the analysis of pollution, the theory must be taken as it is found, and most of it is partial in its orientation. Moreover, apart from the usefulness of partial analysis in its own right, it is essential that the reader fully understands it in order to appreciate the advantages and shortcomings of the highly aggregated analysis of chapter 3 and the more general and disaggregated analysis of chapter 4.