Journal
EUROPEAN JOURNAL OF OPERATIONAL RESEARCH
Volume 250, Issue 1, Pages 342-346Publisher
ELSEVIER SCIENCE BV
DOI: 10.1016/j.ejor.2015.10.061
Keywords
OR in environment and climate change; Environmental efficiency; Data envelopment analysis; Weak G-disposability
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This note takes up a shortcoming of Coelli et al.'s (2007) popular environmental efficiency measure and its extension to economic-environmental trade-off analysis (see Van Meensel et al. (2010)), namely that they do not reward emission reductions by pollution control. A new environmental efficiency measure that overcomes this issue and - similar to Coelli et al.'s efficiency measure - is in line with the materials balance principle is proposed and further decomposed into technical environmental efficiency and material and nonmaterial allocative environmental efficiencies. The new efficiency measure collapses into Coelli et al.'s efficiency measure if none of the considered Decision Making Units control pollutants. A numerical example using Data Envelopment Analysis is provided to further explore the properties of the new efficiency measure. (C) 2015 Elsevier B.V. and Association of European Operational Research Societies (EURO) within the International Federation of Operational Research Societies (IFORS). All rights reserved.
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