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Environmental efficiency measurement with translog distance functions: A parametric approach

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  • Cuesta, Rafael A.
  • Lovell, C.A. Knox
  • Zofío, José L.

Abstract

We introduce new specifications and estimation procedures of traditional distance functions that allow researchers to undertake environmental efficiency and productivity studies within a parametric stochastic framework. Relying on a translog distance function specification that treats the outputs' vector asymmetrically by allowing equiproportional desirable outputs expansion and undesirable outputs contraction, we discuss the relevant properties that characterize the environmental hyperbolic distance function, and show that it can be easily implemented using conventional econometric techniques based on maximum likelihood estimation. We illustrate our model estimating technical efficiency scores for a panel of U.S. electricity generating units that produce electricity and SO2 emissions as byproduct.

Suggested Citation

  • Cuesta, Rafael A. & Lovell, C.A. Knox & Zofío, José L., 2009. "Environmental efficiency measurement with translog distance functions: A parametric approach," Ecological Economics, Elsevier, vol. 68(8-9), pages 2232-2242, June.
    • Handle: RePEc:eee:ecolec:v:68:y:2009:i:8-9:p:2232-2242
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    More about this item

    Keywords

    Parametric distance functions Stochastic frontier analysis Environmental efficiency Undesirable outputs;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

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