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Decomposition of the environmental inefficiency of the meta-frontier with undesirable output


  • Chiu, Ching-Ren
  • Liou, Je-Liang
  • Wu, Pei-Ing
  • Fang, Chen-Ling


In this paper, we present an alternative analysis framework to evaluate the effects of technology heterogeneities and undesirable output on environmental efficiency measurement. The proposed framework combines the directional distance function and a meta-frontier analysis. It can be used to measure efficiency improvements brought about by enhanced technical management and technological advances. For demonstration purposes, we used the framework to measure the environmental efficiency in 90 countries worldwide for the 2003–2007 period. The results showed that when the meta-technology set is used as the evaluation basis, the average environmental efficiency of high competitiveness countries is greater than that of lower-middle, low, and upper-middle competitiveness countries. The upper-middle competitiveness countries perform worse than the lower-middle and low competitiveness countries because of the excessive labor force usage and carbon dioxide emissions in these countries. We also found that the environmental inefficiency of the meta-frontier for high competitiveness countries can be attributed to managerial failure in the production process, whereas that for upper-middle, lower-middle, and low competitiveness countries can be attributed to technological differences.

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  • Chiu, Ching-Ren & Liou, Je-Liang & Wu, Pei-Ing & Fang, Chen-Ling, 2012. "Decomposition of the environmental inefficiency of the meta-frontier with undesirable output," Energy Economics, Elsevier, vol. 34(5), pages 1392-1399.
  • Handle: RePEc:eee:eneeco:v:34:y:2012:i:5:p:1392-1399 DOI: 10.1016/j.eneco.2012.06.003

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    More about this item


    Environmental efficiency; Meta-frontier inefficiency; Carbon dioxide emissions; Directional distance function;

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming


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