Evaluating eco-efficiency with data envelopment analysis: an analytical reexamination
Chien-Ming Chen ()
Annals of Operations Research, 2014, vol. 214, issue 1, 49-71
This paper reexamines the unintended consequences of the two widely cited models for measuring environmental efficiency—the hyperbolic efficiency model (HEM) and directional distance function (DDF). I prove the existence of three main problems: (1) these two models are not monotonic in undesirable outputs (i.e., a firm’s efficiency may increase when polluting more, and vice versa), (2) strongly dominated firms may appear efficient, and (3) some firms’ environmental efficiency scores may be computed against strongly dominated points. Using the supply-chain carbon emissions data from the 50 major U.S. manufacturing companies, I empirically compare these two models with a weighted additive DEA model. The empirical results corroborate the analytical findings that the DDF and HEM models can generate spurious efficiency estimates and must be used with extreme caution. Copyright Springer Science+Business Media New York 2014
Keywords: Eco-efficiency; Undesirable outputs; Data envelopment analysis; Carbon efficiency; Manufacturing (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:annopr:v:214:y:2014:i:1:p:49-71:10.1007/s10479-013-1488-z
Ordering information: This journal article can be ordered from
Access Statistics for this article
Annals of Operations Research is currently edited by Endre Boros
More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla ().