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Environmental efficiency measurement and the materials balance condition reconsidered

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  • Rødseth, Kenneth Løvold

Abstract

This note takes up a shortcoming of Coelli et al.’s (2007) popular environmental efficiency measure and its extension to economic-environmental trade-off analysis (see Van Meensel et al. (2010)), namely that they do not reward emission reductions by pollution control. A new environmental efficiency measure that overcomes this issue and - similar to Coelli et al.’s efficiency measure - is in line with the materials balance principle is proposed and further decomposed into “technical environmental efficiency” and “material and nonmaterial allocative environmental efficiencies”. The new efficiency measure collapses into Coelli et al.’s efficiency measure if none of the considered Decision Making Units control pollutants. A numerical example using Data Envelopment Analysis is provided to further explore the properties of the new efficiency measure.

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  • Rødseth, Kenneth Løvold, 2016. "Environmental efficiency measurement and the materials balance condition reconsidered," European Journal of Operational Research, Elsevier, vol. 250(1), pages 342-346.
    • Handle: RePEc:eee:ejores:v:250:y:2016:i:1:p:342-346
    DOI: 10.1016/j.ejor.2015.10.061
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    References listed on IDEAS

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    1. Sushama Murty & R. Robert Russell, "undated". "Bad Outputs," Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi Discussion Papers 17-06, Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi, India.
    2. George Vlontzos & Spyros Niavis & Panos Pardalos, 2017. "Testing for Environmental Kuznets Curve in the EU Agricultural Sector through an Eco-(in)Efficiency Index," Energies, MDPI, vol. 10(12), pages 1-15, December.

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