Environmental Efficiency Measurement with Translog Distance Functions: A Parametric Approach

Rafael A. Cuesta (), C.A. Knox () and José Zofío
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Rafael A. Cuesta: Departamento de Economía, Universidad de Oviedo, E-33071, Oviedo, Spain.
C.A. Knox: Department of Economics, Terry College of Business, University of Georgia, Athens, GA 30602, USA

No 2007/02, Working Papers in Economic Theory from Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History)

Abstract: We use a flexible parametric hyperbolic distance function to estimate environmental efficiency when some outputs are undesirable. Cuesta and Zofio (J. Prod. Analysis (2005), 31-48) introduced this distance function specification in conventional input-output space to estimate technical efficiency within a stochastic frontier context. We extend their approach to accommodate undesirable outputs and to estimate environmental efficiency within a stochastic frontier context. This provides a parametric counterpart to Färe et al.’s popular nonparametric environmental efficiency measures (Rev. Econ. Stat. 75 (1989), 90-98). The distance function model is applied to a panel of U.S. electricity generating units that produce marketed electricity and non-marketed SO2 emissions.

Keywords: Undesirable outputs; parametric distance functions; stochastic frontier analysis; environmental efficiency (search for similar items in EconPapers)
JEL-codes: C32 L95 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2007-03
New Economics Papers: this item is included in nep-ecm, nep-eff, nep-ene and nep-env
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Journal Article: Environmental efficiency measurement with translog distance functions: A parametric approach (2009)
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