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The External Performance Appraisal of China Energy Regulation: An Empirical Study Using a TOPSIS Method Based on Entropy Weight and Mahalanobis Distance

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  • Zheng-Xin Wang

    (School of Economics, Zhejiang University of Finance & Economics, Hangzhou 310018, China
    Center for Research of Regulation & Policy, Zhejiang University of Finance & Economics, Hangzhou 310018, China)

  • Dan-Dan Li

    (School of Economics, Zhejiang University of Finance & Economics, Hangzhou 310018, China)

  • Hong-Hao Zheng

    (School of Economics, Zhejiang University of Finance & Economics, Hangzhou 310018, China)

Abstract

In China’s industrialization process, the effective regulation of energy and environment can promote the positive externality of energy consumption while reducing negative externality, which is an important means for realizing the sustainable development of an economic society. The study puts forward an improved technique for order preference by similarity to an ideal solution based on entropy weight and Mahalanobis distance (briefly referred as E-M-TOPSIS). The performance of the approach was verified to be satisfactory. By separately using traditional and improved TOPSIS methods, the study carried out the empirical appraisals on the external performance of China’s energy regulation during 1999~2015. The results show that the correlation between the performance indexes causes the significant difference between the appraisal results of E-M-TOPSIS and traditional TOPSIS. The E-M-TOPSIS takes the correlation between indexes into account and generally softens the closeness degree compared with traditional TOPSIS. Moreover, it makes the relative closeness degree fluctuate within a small-amplitude. The results conform to the practical condition of China’s energy regulation and therefore the E-M-TOPSIS is favorably applicable for the external performance appraisal of energy regulation. Additionally, the external economic performance and social responsibility performance (including environmental and energy safety performances) based on the E-M-TOPSIS exhibit significantly different fluctuation trends. The external economic performance dramatically fluctuates with a larger fluctuation amplitude, while the social responsibility performance exhibits a relatively stable interval fluctuation. This indicates that compared to the social responsibility performance, the fluctuation of external economic performance is more sensitive to energy regulation.

Suggested Citation

  • Zheng-Xin Wang & Dan-Dan Li & Hong-Hao Zheng, 2018. "The External Performance Appraisal of China Energy Regulation: An Empirical Study Using a TOPSIS Method Based on Entropy Weight and Mahalanobis Distance," IJERPH, MDPI, vol. 15(2), pages 1-18, January.
    • Handle: RePEc:gam:jijerp:v:15:y:2018:i:2:p:236-:d:129489
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