Evolving the latent variable model as an environmental DEA technology

Abraham Bretholt and Jeh-Nan Pan

Omega, 2013, vol. 41, issue 2, 315-325

Abstract: This article tests several nonparametric DEA models for their ability to accurately decompose CO2 emissions change using a Malmquist styled decomposition framework. This production oriented activity analysis involves panel data and two data sets from the literature for comparison. A new Latent Variable radial input-oriented technology is introduced that is closely associated with a Koopmans Efficient Slacks Based Model. The Latent Variable technology simultaneously reduces inputs and undesirable outputs in a single Multiple Objective Linear Program. This production theoretic methodology is adapted to preserve both scale efficiency and causality within the envelopment framework. Finally, the application studies demonstrate the internal consistency of the Latent Variable reduction coefficients, which overturns previous results and paves the way for further research into undesirable externalities.

Keywords: DEA; Scale efficiency; Multicriteria; Optimization; Slacks based model; Malmquist Index; Decomposition; Undesirable outputs and externalities; Efficiency; Resource management (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jomega:v:41:y:2013:i:2:p:315-325

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DOI: 10.1016/j.omega.2012.04.001

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