A parametric frontier model for measuring eco-efficiency

Luis Orea and Alan Wall

No 2015/02, Efficiency Series Papers from University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG)

Abstract: Eco-efficiency has been defined by the OECD as “the efficiency with which ecological resources are used to meet human needs” and can be considered a measure of environmental performance that takes into account both the environmental and economic objectives of firms. Frontier models are an ideal tool for measuring eco-efficiency. While the literature applying frontier models to the empirical measurement of eco-efficiency has been growing steadily in recent years, it has exclusively relied on non-parametric Data Envelopment Analysis (DEA) methods to measure eco-efficiency and its determinants. We propose a parametric Stochastic Frontier (SF) model to measure eco-efficiency, arguing that this has several potential advantages. We provide an empirical application using cross-sectional data from Spanish dairy farms which includes information on environmental and economic indicators as well as a series of potential socio-economic determinants of eco-efficiency.

Pages: 24
Date: 2015
New Economics Papers: this item is included in nep-cse, nep-eff and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:oeg:wpaper:2015/02

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