Joint Production of Good and Bad Outputs with a Network Application RolfF¨are ∗,∗∗ , Shawna Grosskopf ∗ ∗ Department of Economics ∗∗ Department of Agricultural and Resource Economics Oregon State University Corvallis, OR 97331, USA and Carl Pasurka U.S. Environmental Protection Agency Washington, D.C. ∗ September 27, 2011 Abstract This paper surveys the literature on the joint production of good and bad outputs. Recently, material balance has arisen as an issue in this literature as a restriction on the technology, which we also address. We use our preferred speci- fication of joint production technology and estimate the efficiency of U.S. electric utilities in a network setting. This network allows to specify two subtechnologies, one of which is an abatement technology. 1 Introduction The evaluation of performance which accounts for joint production of good and bad out- puts has become a small industry, for which we hope to provide a selective survey, which focuses on modeling and measurement issues. Also included is an application of our * We would like to thank participants at the Verona EWEPA meetings special session on good mod- eling of bad outputs for their comments and Curtis Carlson for providing his capital stock data. 1