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Productivity and Undesirable Outputs: A Directional Distance Function Approach

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  • Yangho Chung

    (Southern Illinois Univ. at Carbondale)

  • Rolf Fare

    (Southern Illinois Univ. at Carbondale)

Abstract

Undesirable outputs are often produced together with desirable outputs. This joint production of good and bad outputs brings about a difficulty for productivity measurement. Here we introduce a directional distance function and use it as a component in a new productivity index. This index, as an empirical example shows, seems to solve the problem caused by the joint production of good and bad outputs.

Suggested Citation

  • Yangho Chung & Rolf Fare, 1995. "Productivity and Undesirable Outputs: A Directional Distance Function Approach," Microeconomics 9511002, University Library of Munich, Germany, revised 09 Nov 1995.
    • Handle: RePEc:wpa:wuwpmi:9511002
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    References listed on IDEAS

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    6. 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.
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    8. Briec, W., 1995. "A Graph Type Extension of Farrell Technical Efficiency Measure," G.R.E.Q.A.M. 95a28, Universite Aix-Marseille III.
    9. Chambers, Robert G. & Chung, Yangho & Fare, Rolf, 1996. "Benefit and Distance Functions," Journal of Economic Theory, Elsevier, vol. 70(2), pages 407-419, August.
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    Cited by:

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    2. Deng, Haiyan & Zheng, Wangyi & Shen, Zhiyang & Štreimikienė, Dalia, 2023. "Does fiscal expenditure promote green agricultural productivity gains: An investigation on corn production," Applied Energy, Elsevier, vol. 334(C).
    3. Xingming Li & Pengfei Shi & Yazhi Han & Aimin Deng & Duan Liu, 2020. "Measurement and Spatial Variation of Green Total Factor Productivity of the Tourism Industry in China," IJERPH, MDPI, vol. 17(4), pages 1-14, February.
    4. Ying Qu & Ying Yu & Andrea Appolloni & Mengru Li & Yue Liu, 2017. "Measuring Green Growth Efficiency for Chinese Manufacturing Industries," Sustainability, MDPI, vol. 9(4), pages 1-18, April.
    5. Chung, Yeimin & Heshmati, Almas, 2013. "Measurement of Environmentally Sensitive Productivity Growth in Korean Industries," IZA Discussion Papers 7235, Institute of Labor Economics (IZA).
    6. Jinkai Li & Jueying Chen & Heguang Liu, 2021. "Sustainable Agricultural Total Factor Productivity and Its Spatial Relationship with Urbanization in China," Sustainability, MDPI, vol. 13(12), pages 1-15, June.
    7. Mengqi Gong & Zhe You & Linting Wang & Jinhua Cheng, 2020. "Environmental Regulation, Trade Comparative Advantage, and the Manufacturing Industry’s Green Transformation and Upgrading," IJERPH, MDPI, vol. 17(8), pages 1-17, April.
    8. Alfredsson, Eva & Månsson, Jonas & Vikström, Peter, 2016. "Internalising external environmental effects in efficiency analysis," Economic Analysis and Policy, Elsevier, vol. 51(C), pages 22-31.
    9. Yuxin Li & Karen Mumford, "undated". "Aspirations, Expectations and Education Outcomes for Children in Britain: Considering Relative Measures of Family Efficiency," Discussion Papers 09/26, Department of Economics, University of York.
    10. Subhash C. Ray & Kankana Mukherjee, 2007. "Efficiency in Managing the Environment and the Opportunity Cost of Pollution Abatement," Working papers 2007-09, University of Connecticut, Department of Economics.
    11. Xiang Yan & Yongchun Huang, 2021. "Is there a nonlinear economic threshold effect of financial development on the efficiency of sci‐tech innovation? An empirical test from the Yangtze River Economic Belt," Growth and Change, Wiley Blackwell, vol. 52(3), pages 1387-1409, September.
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    14. Wang, Ailun & Hu, Shuo & Lin, Boqiang, 2021. "Emission abatement cost in China with consideration of technological heterogeneity," Applied Energy, Elsevier, vol. 290(C).

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    More about this item

    Keywords

    productivity & efficiency measurement; joint products; distance functions;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D2 - Microeconomics - - Production and Organizations
    • D3 - Microeconomics - - Distribution
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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