Ambivalent joint production: Putting the issues in perspective

The laws of thermodynamics imply that all production is joint production. However, while thermodynamics allows to make statements about the quantities of inputs and outputs involved in the process of production, it cannot give a satisfactory answer to the question of the inputs’ and outputs’ value. As far as the latter is concerned, it has been shown that the character of joint outputs as goods, free goods or bads hinges on the economic context of production and, in general, depends on many different factors. As one or more of these factors change over time, the character of a joint output may also change over time. What has been a bad at some point in time may turn into a good, or vice versa. Furthermore, the preception of outputs as goods, free goods or bads may change with the observer’s knowledge about the output, e.g. its environmental impact or alternative uses for it.