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Eco-Efficiency Analysis of Consumer Durables Using Absolute Shadow Prices

Mika Kortelainen and Timo Kuosmanen ()

Public Economics from EconWPA

Abstract: We develop a method for eco-efficiency analysis of consumer durables by utilizing Data Envelopment Analysis (DEA). In contrast to previous product efficiency studies, we consider the measurement problem from the perspective of a policy maker. The novel innovation of the paper is to measure efficiency in terms of absolute shadow prices that are optimized endogenously within the model to maximize efficiency of the good. Thus, the efficiency measure has a direct economic interpretation as a monetary loss due to inefficiency, expressed in some currency unit. The advantages as well as technical differences between the proposed approach and the traditional production-side methods are discussed in detail. We illustrate the approach by an application to eco-efficiency evaluation of Sport Utility Vehicles.

Keywords: Activity Analysis; Data Envelopment Analysis (DEA); Environmental efficiency; Product evaluation; Sport Utility Vehicles (SUVs) (search for similar items in EconPapers)
JEL-codes: C14 C61 D61 D62 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff and nep-ene
Date: 2005-11-29
Note: Type of Document - pdf; pages: 39
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Journal Article: Eco-efficiency analysis of consumer durables using absolute shadow prices (2007) Downloads
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwppe:0511022

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