IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v51y2015icp329-345.html
   My bibliography  Save this article

DEA environmental assessment in time horizon: Radial approach for Malmquist index measurement on petroleum companies

Author

Listed:
  • Sueyoshi, Toshiyuki
  • Goto, Mika

Abstract

The climate change and various pollutions have been influencing our societies and economies. The environmental assessment, to be discussed in this study, is increasingly important because it serves as an initial step toward pollution prevention. Corporate leaders, policy makers, researchers and individuals who are interested in environmental protection have been paying attention to the assessment so that they can prepare policy suggestions on the global warming and climate change. As a methodology for the assessment, this study proposes a use of Data Environment Analysis (DEA) in a time horizon. Most of data sets on the climate change are sampled in a time series where the performance of organizations fluctuates every moment. In applying the DEA environmental assessment to such a data set, it is necessary for us to classify outputs into desirable (e.g., oil production) and undesirable (e.g., CO2 emission) categories because all organizations usually produce not only desirable but also undesirable outputs as a result of their economic activities. To unify the two different types of outputs, this study incorporates the concept of natural and managerial disposability into the computational framework of DEA and extends them into a time horizon. For the research purpose, this study incorporates Malmquist index into the proposed DEA environmental assessment to examine an occurrence of a frontier shift among multiple periods. The frontier shift indicates a technology progress and/or managerial innovation during an observed period. The index is further separated into four subcomponents in a time horizon. These subcomponents are differently expressed under the natural and managerial disposability. Thus, eight different subcomponents on the Malmquist index are proposed to measure the frontier shift. As an application, this study uses the proposed DEA approach to examine whether the frontier shift (due to technology progress) occurs or not in the petroleum industry from 2005 to 2009. Our empirical study finds that the industry has not exhibited any major frontier shift under natural disposability, but showing a considerable frontier shift under managerial disposability. In other words, the petroleum firms have improved their environmental performance by eco-technology to reduce an amount of CO2 emission during the observed annual periods.

Suggested Citation

  • Sueyoshi, Toshiyuki & Goto, Mika, 2015. "DEA environmental assessment in time horizon: Radial approach for Malmquist index measurement on petroleum companies," Energy Economics, Elsevier, vol. 51(C), pages 329-345.
  • Handle: RePEc:eee:eneeco:v:51:y:2015:i:c:p:329-345
    DOI: 10.1016/j.eneco.2015.07.010
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988315002194
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Sueyoshi, Toshiyuki, 1999. "DEA-discriminant analysis in the view of goal programming," European Journal of Operational Research, Elsevier, vol. 115(3), pages 564-582, June.
    2. Sueyoshi, Toshiyuki & Wang, Derek, 2014. "Radial and non-radial approaches for environmental assessment by Data Envelopment Analysis: Corporate sustainability and effective investment for technology innovation," Energy Economics, Elsevier, vol. 45(C), pages 537-551.
    3. Sueyoshi, Toshiyuki, 2001. "Extended DEA-Discriminant Analysis," European Journal of Operational Research, Elsevier, vol. 131(2), pages 324-351, June.
    4. Sueyoshi, Toshiyuki & Goto, Mika, 2009. "Methodological comparison between DEA (data envelopment analysis) and DEA-DA (discriminant analysis) from the perspective of bankruptcy assessment," European Journal of Operational Research, Elsevier, vol. 199(2), pages 561-575, December.
    5. Sueyoshi, Toshiyuki & Goto, Mika, 2014. "DEA radial measurement for environmental assessment: A comparative study between Japanese chemical and pharmaceutical firms," Applied Energy, Elsevier, vol. 115(C), pages 502-513.
    6. Sueyoshi, Toshiyuki & Goto, Mika, 2012. "DEA radial and non-radial models for unified efficiency under natural and managerial disposability: Theoretical extension by strong complementary slackness conditions," Energy Economics, Elsevier, vol. 34(3), pages 700-713.
    7. Liang Liang & Desheng Wu & Zhongsheng Hua, 2004. "MES-DEA modelling for analysing anti-industrial pollution efficiency and its application in Anhui province of China," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 22(2/3/4), pages 88-98.
    8. Toshiyuki Sueyoshi, 1999. "DEA Duality on Returns to Scale (RTS) in Production and Cost Analyses: An Occurrence of Multiple Solutions and Differences Between Production-Based and Cost-Based RTS Estimates," Management Science, INFORMS, vol. 45(11), pages 1593-1608, November.
    9. Sueyoshi, Toshiyuki & Goto, Mika, 2010. "Should the US clean air act include CO2 emission control?: Examination by data envelopment analysis," Energy Policy, Elsevier, vol. 38(10), pages 5902-5911, October.
    10. Sueyoshi, Toshiyuki & Goto, Mika, 2001. "Slack-adjusted DEA for time series analysis: Performance measurement of Japanese electric power generation industry in 1984-1993," European Journal of Operational Research, Elsevier, vol. 133(2), pages 232-259, January.
    11. Sueyoshi, Toshiyuki & Goto, Mika, 2010. "Measurement of a linkage among environmental, operational, and financial performance in Japanese manufacturing firms: A use of Data Envelopment Analysis with strong complementary slackness condition," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1742-1753, December.
    12. Goto, Mika & Tsutsui, Miki, 1998. "Comparison of Productive and Cost Efficiencies Among Japanese and US Electric Utilities," Omega, Elsevier, vol. 26(2), pages 177-194, April.
    13. Sueyoshi, Toshiyuki & Goto, Mika, 2012. "Returns to Scale, Damages to Scale, Marginal Rate of Transformation and Rate of Substitution in DEA Environmental Assessment," Energy Economics, Elsevier, vol. 34(4), pages 905-917.
    14. Goto, Mika & Otsuka, Akihiro & Sueyoshi, Toshiyuki, 2014. "DEA (Data Envelopment Analysis) assessment of operational and environmental efficiencies on Japanese regional industries," Energy, Elsevier, vol. 66(C), pages 535-549.
    15. Picazo-Tadeo, Andres J. & Reig-Martinez, Ernest & Hernandez-Sancho, Francesc, 2005. "Directional distance functions and environmental regulation," Resource and Energy Economics, Elsevier, vol. 27(2), pages 131-142, June.
    16. Sueyoshi, Toshiyuki & Goto, Mika, 2013. "DEA environmental assessment in a time horizon: Malmquist index on fuel mix, electricity and CO2 of industrial nations," Energy Economics, Elsevier, vol. 40(C), pages 370-382.
    17. Bjurek, Hans, 1996. " The Malmquist Total Factor Productivity Index," Scandinavian Journal of Economics, Wiley Blackwell, vol. 98(2), pages 303-313, June.
    18. Sueyoshi, Toshiyuki & Goto, Mika, 2012. "Efficiency-based rank assessment for electric power industry: A combined use of Data Envelopment Analysis (DEA) and DEA-Discriminant Analysis (DA)," Energy Economics, Elsevier, vol. 34(3), pages 634-644.
    19. Sueyoshi, Toshiyuki & Goto, Mika, 2015. "Environmental assessment on coal-fired power plants in U.S. north-east region by DEA non-radial measurement," Energy Economics, Elsevier, vol. 50(C), pages 125-139.
    20. Sueyoshi, Toshiyuki & Goto, Mika, 2012. "Weak and strong disposability vs. natural and managerial disposability in DEA environmental assessment: Comparison between Japanese electric power industry and manufacturing industries," Energy Economics, Elsevier, vol. 34(3), pages 686-699.
    21. Sueyoshi, Toshiyuki & Goto, Mika, 2009. "Can environmental investment and expenditure enhance financial performance of US electric utility firms under the clean air act amendment of 1990?," Energy Policy, Elsevier, vol. 37(11), pages 4819-4826, November.
    22. Sueyoshi, Toshiyuki, 2006. "DEA-Discriminant Analysis: Methodological comparison among eight discriminant analysis approaches," European Journal of Operational Research, Elsevier, vol. 169(1), pages 247-272, February.
    23. Sueyoshi, Toshiyuki & Goto, Mika, 2011. "Operational synergy in the US electric utility industry under an influence of deregulation policy: A linkage to financial performance and corporate value," Energy Policy, Elsevier, vol. 39(2), pages 699-713, February.
    24. R. Ramanathan, 2002. "Combining indicators of energy consumption and CO 2 emissions: a cross-country comparison," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 17(3), pages 214-227.
    25. Sueyoshi, Toshiyuki & Goto, Mika, 2011. "DEA approach for unified efficiency measurement: Assessment of Japanese fossil fuel power generation," Energy Economics, Elsevier, vol. 33(2), pages 292-303, March.
    26. Korhonen, Pekka J. & Luptacik, Mikulas, 2004. "Eco-efficiency analysis of power plants: An extension of data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 154(2), pages 437-446, April.
    27. Sueyoshi, Toshiyuki & Goto, Mika, 2012. "DEA radial measurement for environmental assessment and planning: Desirable procedures to evaluate fossil fuel power plants," Energy Policy, Elsevier, vol. 41(C), pages 422-432.
    28. Pasurka, Carl Jr., 2006. "Decomposing electric power plant emissions within a joint production framework," Energy Economics, Elsevier, vol. 28(1), pages 26-43, January.
    29. Zhou, P. & Ang, B.W. & Han, J.Y., 2010. "Total factor carbon emission performance: A Malmquist index analysis," Energy Economics, Elsevier, vol. 32(1), pages 194-201, January.
    30. Wang, Derek & Li, Shanling & Sueyoshi, Toshiyuki, 2014. "DEA environmental assessment on U.S. Industrial sectors: Investment for improvement in operational and environmental performance to attain corporate sustainability," Energy Economics, Elsevier, vol. 45(C), pages 254-267.
    31. Yuji Ijiri & Toshiyuki Sueyoshi, 2010. "Accounting Essays by Professor William W. Cooper: Revisiting in Commemoration of his Ninety‐Fifth Birthday," Abacus, Accounting Foundation, University of Sydney, vol. 46(4), pages 464-505, December.
    32. Sueyoshi, Toshiyuki & Goto, Mika, 2009. "Can R&D expenditure avoid corporate bankruptcy? Comparison between Japanese machinery and electric equipment industries using DEA-discriminant analysis," European Journal of Operational Research, Elsevier, vol. 196(1), pages 289-311, July.
    33. Sueyoshi, Toshiyuki & Goto, Mika & Sugiyama, Manabu, 2013. "DEA window analysis for environmental assessment in a dynamic time shift: Performance assessment of U.S. coal-fired power plants," Energy Economics, Elsevier, vol. 40(C), pages 845-857.
    34. Bjurek, Hans & Hjalmarsson, Lennart, 1995. "Productivity in multiple output public service: A quadratic frontier function and Malmquist index approach," Journal of Public Economics, Elsevier, vol. 56(3), pages 447-460, March.
    35. Sueyoshi, Toshiyuki & Goto, Mika, 2012. "Returns to Scale and Damages to Scale with Strong Complementary Slackness Conditions in DEA Assessment: Japanese Corporate Effort on Environment Protection," Energy Economics, Elsevier, vol. 34(5), pages 1422-1434.
    36. Sueyoshi, Toshiyuki & Goto, Mika, 2014. "Investment strategy for sustainable society by development of regional economies and prevention of industrial pollutions in Japanese manufacturing sectors," Energy Economics, Elsevier, vol. 42(C), pages 299-312.
    37. Sueyoshi, Toshiyuki & Yuan, Yan, 2015. "China's regional sustainability and diversified resource allocation: DEA environmental assessment on economic development and air pollution," Energy Economics, Elsevier, vol. 49(C), pages 239-256.
    38. Sueyoshi, Toshiyuki & Sekitani, Kazuyuki, 2009. "An occurrence of multiple projections in DEA-based measurement of technical efficiency: Theoretical comparison among DEA models from desirable properties," European Journal of Operational Research, Elsevier, vol. 196(2), pages 764-794, July.
    39. Zaim, Osman, 2004. "Measuring environmental performance of state manufacturing through changes in pollution intensities: a DEA framework," Ecological Economics, Elsevier, vol. 48(1), pages 37-47, January.
    40. Kumar, Surender, 2006. "Environmentally sensitive productivity growth: A global analysis using Malmquist-Luenberger index," Ecological Economics, Elsevier, vol. 56(2), pages 280-293, February.
    41. Sueyoshi, Toshiyuki & Goto, Mika & Shang, Jennifer, 2009. "Core business concentration vs. corporate diversification in the US electric utility industry: Synergy and deregulation effects," Energy Policy, Elsevier, vol. 37(11), pages 4583-4594, November.
    42. Sueyoshi, Toshiyuki & Goto, Mika, 2013. "A comparative study among fossil fuel power plants in PJM and California ISO by DEA environmental assessment," Energy Economics, Elsevier, vol. 40(C), pages 130-145.
    43. Karen Palmer & Wallace E. Oates & Paul R. Portney, 1995. "Tightening Environmental Standards: The Benefit-Cost or the No-Cost Paradigm?," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 119-132, Fall.
    44. Dyckhoff, H. & Allen, K., 2001. "Measuring ecological efficiency with data envelopment analysis (DEA)," European Journal of Operational Research, Elsevier, vol. 132(2), pages 312-325, July.
    45. Triantis, Konstantinos & Otis, Paul, 2004. "Dominance-based measurement of productive and environmental performance for manufacturing," European Journal of Operational Research, Elsevier, vol. 154(2), pages 447-464, April.
    46. Sueyoshi, Toshiyuki & Goto, Mika, 2012. "DEA environmental assessment of coal fired power plants: Methodological comparison between radial and non-radial models," Energy Economics, Elsevier, vol. 34(6), pages 1854-1863.
    47. Sueyoshi, Toshiyuki & Goto, Mika, 2014. "Environmental assessment for corporate sustainability by resource utilization and technology innovation: DEA radial measurement on Japanese industrial sectors," Energy Economics, Elsevier, vol. 46(C), pages 295-307.
    48. Sueyoshi, Toshiyuki, 2004. "Mixed integer programming approach of extended DEA-discriminant analysis," European Journal of Operational Research, Elsevier, vol. 152(1), pages 45-55, January.
    49. Zhou, P. & Ang, B.W. & Poh, K.L., 2008. "A survey of data envelopment analysis in energy and environmental studies," European Journal of Operational Research, Elsevier, vol. 189(1), pages 1-18, August.
    50. Sueyoshi, Toshiyuki & Goto, Mika, 2012. "Data envelopment analysis for environmental assessment: Comparison between public and private ownership in petroleum industry," European Journal of Operational Research, Elsevier, vol. 216(3), pages 668-678.
    51. Sueyoshi, Toshiyuki & Goto, Mika, 2009. "DEA-DA for bankruptcy-based performance assessment: Misclassification analysis of Japanese construction industry," European Journal of Operational Research, Elsevier, vol. 199(2), pages 576-594, December.
    52. Sueyoshi, Toshiyuki & Goto, Mika & Ueno, Takahiro, 2010. "Performance analysis of US coal-fired power plants by measuring three DEA efficiencies," Energy Policy, Elsevier, vol. 38(4), pages 1675-1688, April.
    53. Sueyoshi, Toshiyuki & Goto, Mika, 2012. "Environmental assessment by DEA radial measurement: U.S. coal-fired power plants in ISO (Independent System Operator) and RTO (Regional Transmission Organization)," Energy Economics, Elsevier, vol. 34(3), pages 663-676.
    54. 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.
    55. Glover, Fred & Sueyoshi, Toshiyuki, 2009. "Contributions of Professor William W. Cooper in Operations Research and Management Science," European Journal of Operational Research, Elsevier, vol. 197(1), pages 1-16, August.
    56. Michael E. Porter & Claas van der Linde, 1995. "Toward a New Conception of the Environment-Competitiveness Relationship," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 97-118, Fall.
    57. Sueyoshi, Toshiyuki & Wang, Derek, 2014. "Sustainability development for supply chain management in U.S. petroleum industry by DEA environmental assessment," Energy Economics, Elsevier, vol. 46(C), pages 360-374.
    58. Sueyoshi, Toshiyuki & Goto, Mika, 2012. "Returns to scale and damages to scale under natural and managerial disposability: Strategy, efficiency and competitiveness of petroleum firms," Energy Economics, Elsevier, vol. 34(3), pages 645-662.
    59. Sueyoshi, Toshiyuki & Aoki, Shingo, 2001. "A use of a nonparametric statistic for DEA frontier shift: the Kruskal and Wallis rank test," Omega, Elsevier, vol. 29(1), pages 1-18, February.
    60. Sueyoshi, Toshiyuki & Goto, Mika, 2013. "Returns to scale vs. damages to scale in data envelopment analysis: An impact of U.S. clean air act on coal-fired power plants," Omega, Elsevier, vol. 41(2), pages 164-175.
    61. Sueyoshi, Toshiyuki & Goto, Mika, 2014. "Photovoltaic power stations in Germany and the United States: A comparative study by data envelopment analysis," Energy Economics, Elsevier, vol. 42(C), pages 271-288.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sueyoshi, Toshiyuki & Yuan, Yan & Goto, Mika, 2017. "A literature study for DEA applied to energy and environment," Energy Economics, Elsevier, vol. 62(C), pages 104-124.
    2. Gong, Shixin & Shao, Cheng & Zhu, Li, 2017. "Energy efficiency evaluation in ethylene production process with respect to operation classification," Energy, Elsevier, vol. 118(C), pages 1370-1379.
    3. repec:gam:jsusta:v:10:y:2018:i:2:p:397-:d:130100 is not listed on IDEAS
    4. Sueyoshi, Toshiyuki & Yuan, Yan, 2016. "Returns to damage under undesirable congestion and damages to return under desirable congestion measured by DEA environmental assessment with multiplier restriction: Economic and energy planning for s," Energy Economics, Elsevier, vol. 56(C), pages 288-309.
    5. repec:eee:appene:v:228:y:2018:i:c:p:2308-2320 is not listed on IDEAS
    6. repec:bla:ijhplm:v:31:y:2016:i:4:p:537-553 is not listed on IDEAS
    7. repec:eee:eneeco:v:67:y:2017:i:c:p:554-571 is not listed on IDEAS
    8. repec:eee:eneeco:v:66:y:2017:i:c:p:154-166 is not listed on IDEAS
    9. repec:eee:eneeco:v:72:y:2018:i:c:p:276-289 is not listed on IDEAS
    10. repec:gam:jsusta:v:10:y:2018:i:1:p:110-:d:125827 is not listed on IDEAS
    11. Sueyoshi, Toshiyuki & Goto, Mika, 2016. "Undesirable congestion under natural disposability and desirable congestion under managerial disposability in U.S. electric power industry measured by DEA environmental assessment," Energy Economics, Elsevier, vol. 55(C), pages 173-188.
    12. repec:gam:jsusta:v:9:y:2017:i:5:p:842-:d:98960 is not listed on IDEAS
    13. repec:eee:eneeco:v:64:y:2017:i:c:p:306-320 is not listed on IDEAS
    14. Sueyoshi, Toshiyuki & Goto, Mika, 2015. "Japanese fuel mix strategy after disaster of Fukushima Daiichi nuclear power plant: Lessons from international comparison among industrial nations measured by DEA environmental assessment in time hori," Energy Economics, Elsevier, vol. 52(PA), pages 87-103.
    15. Sueyoshi, Toshiyuki & Yuan, Yan, 2015. "Comparison among U.S. industrial sectors by DEA environmental assessment: Equipped with analytical capability to handle zero or negative in production factors," Energy Economics, Elsevier, vol. 52(PA), pages 69-86.
    16. repec:eee:eneeco:v:67:y:2017:i:c:p:439-453 is not listed on IDEAS
    17. Sanz-Díaz, María Teresa & Velasco-Morente, Francisco & Yñiguez, Rocío & Díaz-Calleja, Emilio, 2017. "An analysis of Spain's global and environmental efficiency from a European Union perspective," Energy Policy, Elsevier, vol. 104(C), pages 183-193.
    18. repec:eee:eneeco:v:65:y:2017:i:c:p:389-398 is not listed on IDEAS
    19. Sueyoshi, Toshiyuki & Yuan, Yan, 2016. "Marginal Rate of Transformation and Rate of Substitution measured by DEA environmental assessment: Comparison among European and North American nations," Energy Economics, Elsevier, vol. 56(C), pages 270-287.
    20. repec:eee:ejores:v:264:y:2018:i:1:p:1-16 is not listed on IDEAS

    More about this item

    Keywords

    Environmental assessment; DEA; Time series; Malmquist index; Petroleum;

    JEL classification:

    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:51:y:2015:i:c:p:329-345. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/eneco .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.