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Measuring environmental efficiency of thermoelectric power plants: a common equilibrium efficient frontier DEA approach with fixed-sum undesirable output

Author

Listed:
  • Jie Wu

    (University of Science and Technology of China)

  • Panpan Xia

    (University of Science and Technology of China)

  • Qingyuan Zhu

    (University of Science and Technology of China
    University of Illinois at Urbana-Champaign)

  • Junfei Chu

    (University of Science and Technology of China)

Abstract

China’s rapid development in economy has intensified many problems. One of the most important issues is the problem of environmental pollution. In this paper, a new DEA approach is proposed to measure the environmental efficiency of thermoelectric power plants, considering undesirable outputs. First, we assume that the total amount of undesirable outputs of any particular type is limited and fixed to current levels. In contrast to previous studies, this study requires fixed-sum undesirable outputs. In addition, the common equilibrium efficient frontier is constructed by using different input/output multipliers (or weights) for each different decision making unit (DMU), while previous approaches which considered fixed-sum outputs assumed a common input/output multiplier for all DMUs. The proposed method is applied to measure the environmental efficiencies of 30 thermoelectric power plants in mainland China. Our empirical study shows that half of the plants perform well in terms of environmental efficiency.

Suggested Citation

  • Jie Wu & Panpan Xia & Qingyuan Zhu & Junfei Chu, 2019. "Measuring environmental efficiency of thermoelectric power plants: a common equilibrium efficient frontier DEA approach with fixed-sum undesirable output," Annals of Operations Research, Springer, vol. 275(2), pages 731-749, April.
    • Handle: RePEc:spr:annopr:v:275:y:2019:i:2:d:10.1007_s10479-018-2958-0
    DOI: 10.1007/s10479-018-2958-0
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