Distinguishing Weak and Strong Disposability among Undesirable Outputs in DEA: The Example of the Environmental Efficiency of Chinese Coal-Fired Power Plants
AbstractDifferent from traditional efficiency research and previous studies considering undesirable outputs, this paper proposes models which distinguish weak and strong disposability features among various undesirable outputs based on the technical nature of the undesirable outputs. The paper illustrates the approach using a research sample covering 582 base-load Chinese coal-fired power plants in 2002. Our final results show that (1) imposing the technically correct disposability features on undesirable outputs makes a significant difference to the final efficiency evaluation. This suggests the necessity of properly distinguishing disposability features among undesirable outputs in efficiency models; (2) compared to their US and European counterparts, Chinese power plants relatively waste more resources. This suggests a great urgency for the Chinese electricity industry to improve its efficiency in coal-fired electricity generation sector.
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Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0741.
Date of creation: 2007
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Web page: http://www.econ.cam.ac.uk/index.htm
Economics: input-output analysis; Environment; Government: energy policies; Industries: electric; Statistics: nonparametric.;
Find related papers by JEL classification:
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-09-16 (All new papers)
- NEP-CNA-2007-09-16 (China)
- NEP-EFF-2007-09-16 (Efficiency & Productivity)
- NEP-ENE-2007-09-16 (Energy Economics)
- NEP-ENV-2007-09-16 (Environmental Economics)
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