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A multicomponent DEA approach to measure the economic and energy efficiencies of OECD countries

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  • Abbas Valadkhani
  • Israfil Roshdi
  • Russell Smyth

Abstract

We employ a multicomponent Data Envelopment Analysis (DEA) framework to examine the interplay between economic and energy efficiency for all 29 OECD countries and then classify each country into one of four categories in terms of their relative economic and energy efficiency. In addition to using a broader set of inputs and improved measure of labour compared with prior studies, we make a methodological contribution in that we develop a new complete multi-component DEA measure for examining the efficiency performance of individual countries. Our proposed measure provides an efficiency index, not only at the country level, but also decomposes overall efficiency into economic and energy components. The G7 countries display the worst performance, in terms of CO2 and energy efficiencies. For the sample as a whole, there is a positive and marginally significant relationship between economic efficiency and energy efficiency. This finding suggests that higher economic and energy efficiencies are not necessarily incompatible goals.

Suggested Citation

  • Abbas Valadkhani & Israfil Roshdi & Russell Smyth, 2015. "A multicomponent DEA approach to measure the economic and energy efficiencies of OECD countries," Monash Economics Working Papers 09-15, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2015-09
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    Cited by:

    1. Borozan, Djula, 2018. "Technical and total factor energy efficiency of European regions: A two-stage approach," Energy, Elsevier, vol. 152(C), pages 521-532.

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    More about this item

    Keywords

    Energy efficiency; CO2 emissions; Real GDP; Data envelopment analysis;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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