TY - JOUR ID - 6009 TI - Deadweight Loss under Market Power and Environmental Inefficiency in an Imperfect Competition: Iran’s Energy-Intensive Industries Case JO - Iranian Journal of Economic Studies JA - IJES LA - en SN - 2322-1402 AU - Shahiki Tash, Mohammad Nabi AU - khajehhasani, Mostafa AU - Yaqubi, Morteza AD - Department of Economics, University of Sistan and Baluchestan, Sistan and Baluchestan, Iran. AD - Department of Agricultural Economics, Agricultural Faculty, Saffron Institute, University of Torbat Heydarieh, Razavi Khorasan, Iran. Y1 - 2020 PY - 2020 VL - 9 IS - 1 SP - 93 EP - 116 KW - Social Welfare Costs KW - Environmental Pollution KW - Market Performance KW - Energy-Intensive Industries KW - Monopoly DO - 10.22099/ijes.2021.36623.1655 N2 - Monopoly and negative externalities are two aspects of market failure that affect the market performance. This study extends the Leibenstein approach, a framework to measure the market performance, which evaluates the social welfare costs of market power and environmental inefficiency. To assess the deadweight loss, we capture pollution impacts, on the market performance in an imperfect competition. In doing so, we assess marginal costs and price elasticity of demand by a Translog function, market power by Herfindahl-Hirschman and Lerner indices, and environmental inefficiency by directional distance functions, at a Cournot competition for Iran’s energy-intensive industries at the four-digit ISIC level. Our results demonstrate that the social welfare costs of welfare triangle and economic rent are negligible and include a small amount of welfare costs. Non-ferrous foundry imposes the lowest social cost (1.03% of its production value), and cement, lime and gypsum industries impose the highest social cost (50.7% of their production value). Those industries with more market power pay less attention to the environment. In polluting industries, welfare loss, due to market power, is relatively negligible. However, relatively high cost of social welfare, due to environmental inefficiency, indicates the necessity of levying a green tax to reduce the adverse effects. UR - https://ijes.shirazu.ac.ir/article_6009.html L1 - https://ijes.shirazu.ac.ir/article_6009_30e3fef3754ffae5dfe68c3f865240f0.pdf ER -