Separating Environmental Efficiency into Production and Abatement Efficiency – A Nonparametric Model with Application to U.S. Power Plants

Benjamin Hampf

Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL)

Abstract: In this paper we present a new approach to evaluate the environmental efficiency of decision making units. We propose a model that describes a two-stage process consisting of a production and an end-of-pipe abatement stage with the environmental efficiency being determined by the efficiency of both stages. Taking the dependencies between the two stages into account, we show how nonparametric methods can be used to measure environmental efficiency and to decompose it into production and abatement efficiency. For an empirical illustration we apply our model to an analysis of U.S. power plants.

Date: 2011-08
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Published in Darmstadt Discussion Papers in Economics . 204 (2011-08)

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Persistent link: https://EconPapers.repec.org/RePEc:dar:wpaper:53901

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