Exploring the economic impact of construction pollution by disaggregating the construction sector of the input-output table

Abstract

It has been argued that much environmental pollution is attributed to the construction sector. Other than the study of how such pollutants affect other parties, emphasis can be placed on estimating its economic impact on the construction sector itself. By knowing this, the sector may think of protecting itself by reducing pollutants. The study employs the disaggregated method in input-output (I-O) analyses to partition the original sector into a construction sector and a construction pollution sector and to employ sensitivity analysis to simulate the economic impacts of different levels of construction pollution. The real I-O tables of Japan are used for demonstration purposes. Results indicate that when the construction sector produces more pollutants, its outputs to other sectors would reduce and the inputs from other sectors would increase. This suggests that the construction sector becomes less economic efficient when more pollutants are generated. As a result, the economic impact of pollution has to be alleviated to improve the efficiency of the sector. This implication may also be applied to other sectors. © 2005 Elsevier Ltd. All rights reserved.