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Evolving the latent variable model as an environmental DEA technology

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  • Bretholt, Abraham
  • Pan, Jeh-Nan
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    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.

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    Bibliographic Info

    Article provided by Elsevier in its journal Omega.

    Volume (Year): 41 (2013)
    Issue (Month): 2 ()
    Pages: 315-325

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    Handle: RePEc:eee:jomega:v:41:y:2013:i:2:p:315-325

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    Related research

    Keywords: DEA; Scale efficiency; Multicriteria; Optimization; Slacks based model; Malmquist Index; Decomposition; Undesirable outputs and externalities; Efficiency; Resource management;

    References

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    Cited by:
    1. Liu, John S. & Lu, Louis Y.Y. & Lu, Wen-Min & Lin, Bruce J.Y., 2013. "A survey of DEA applications," Omega, Elsevier, vol. 41(5), pages 893-902.

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