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Materials Balance Based Modelling Of Environmental Efficiency

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  • Lauwers, Ludwig H.
  • Van Huylenbroeck, Guido
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    Abstract

    A new method for analysing environmental efficiency, based on the materials balance, is proposed. With this method, an environmental allocative efficiency measure can be defined analogously to the more commonly used economic allocative efficiency. Nutrient surplus in pig fattening, a typical balance indicator, is used to illustrate the concept in a two input – one output case. The materials balance based efficiency analysis is elaborated using data envelopment analysis (DEA). Results are compared with those of more common, merely input or output oriented DEA approaches. A main conclusion is that, ignoring the balance feature of environmental issues such as nutrient surplus might be a main reason why traditional integral analyses of economic and environmental efficiency yield contradictory conclusions.

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    File URL: http://purl.umn.edu/25916
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    Bibliographic Info

    Paper provided by International Association of Agricultural Economists in its series 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa with number 25916.

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    Date of creation: 2003
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    Handle: RePEc:ags:iaae03:25916

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    Keywords: Environmental Economics and Policy;

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    1. Coelli, T. J., 1995. "Recent Developments in Frontier Modelling and Efficiency Measurement," 1995 Conference (39th), February 14-16, 1995, Perth, Australia 148798, Australian Agricultural and Resource Economics Society.
    2. Sharma, Khem R. & Leung, PingSun & Zaleski, Halina M., 1999. "Technical, allocative and economic efficiencies in swine production in Hawaii: a comparison of parametric and nonparametric approaches," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 20(1), January.
    3. Isabelle Piot-Lepetit & Dominique Vermersch & Robert Weaver, 1997. "Agriculture's environmental externalities: DEA evidence for French agriculture," Applied Economics, Taylor & Francis Journals, vol. 29(3), pages 331-338.
    4. Sharma, Khem R. & Leung, PingSun & Zaleski, Halina M., 1999. "Technical, allocative and economic efficiencies in swine production in Hawaii: a comparison of parametric and nonparametric approaches," Agricultural Economics, Blackwell, vol. 20(1), pages 23-35, January.
    5. Fare, Rolf, et al, 1989. "Multilateral Productivity Comparisons When Some Outputs Are Undesirable: A Nonparametric Approach," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 90-98, February.
    6. Stijn Reinhard & C.A. Knox Lovell & Geert Thijssen, 1999. "Econometric Estimation of Technical and Environmental Efficiency: An Application to Dutch Dairy Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 44-60.
    7. Fare, Rolf, et al, 1993. "Derivation of Shadow Prices for Undesirable Outputs: A Distance Function Approach," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 374-80, May.
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