Measuring Eco-efficiency of Production: A Frontier Approach

Mika Kortelainen and Timo Kuosmanen ()

Econometrics from EconWPA

Abstract: Eco-efficiency of production is an important concept both from the viewpoint of society and business community; but as yet, there is no unambiguous way to its measurement. The purpose of this paper is to present a general measurement framework based on production theory and the activity analysis approach. Although we exploit the existing methods and techniques, our approach diverges essentially from the usual treatments of the environmental performance of firms in the productive efficiency analysis. The main difference between our approach and the earlier studies is that we build on the definition of eco-efficiency as the ratio of economic value added to the environmental damage index. Related to this orientation, we also approach eco-efficiency from a more aggregate perspective. Our general framework is illustrated by an empirical application to the evaluation of eco-efficiency of road transportation in Finland.

Keywords: Eco-efficiency; Environmental Pressures; Aggregation; Benefit of the Doubt Weighting; Distance Function; Activity Analysis; Data Envelopment Analysis; Road transportation (search for similar items in EconPapers)
JEL-codes: C43 Q00 C61 (search for similar items in EconPapers)
Date: 2004-11-10
Note: Type of Document - pdf; pages: 23
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpem:0411006

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