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Optimal Directions for Directional Distance Functions: An Exploration of Potential Reductions of Greenhouse Gases

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  • Benjamin Hampf
  • Jens J. Krüger

Abstract

This article explores the reduction potential of greenhouse gases for major pollution-emitting countries of the world using nonparametric productivity measurement methods and directional distance functions. In contrast to the existing literature, we apply optimization methods to endogenously determine optimal directions for the efficiency analysis. These directions represent the compromise of output enhancement and emissions reduction. The results show that for reasonable directions the adoption of best practices would lead to sizable emission reductions in a range of approximately 20% compared with current levels.

Suggested Citation

  • Benjamin Hampf & Jens J. Krüger, 2015. "Optimal Directions for Directional Distance Functions: An Exploration of Potential Reductions of Greenhouse Gases," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(3), pages 920-938.
  • Handle: RePEc:oup:ajagec:v:97:y:2015:i:3:p:920-938.
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    File URL: http://hdl.handle.net/10.1093/ajae/aau035
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    Cited by:

    1. repec:eee:ejores:v:276:y:2019:i:1:p:202-211 is not listed on IDEAS
    2. repec:kap:jproda:v:50:y:2018:i:1:d:10.1007_s11123-018-0534-x is not listed on IDEAS
    3. repec:spr:empeco:v:54:y:2018:i:1:d:10.1007_s00181-017-1233-6 is not listed on IDEAS
    4. Wang, Ke & Wei, Yi-Ming & Huang, Zhimin, 2016. "Potential gains from carbon emissions trading in China: A DEA based estimation on abatement cost savings," Omega, Elsevier, vol. 63(C), pages 48-59.
    5. repec:eee:proeco:v:199:y:2018:i:c:p:1-6 is not listed on IDEAS
    6. Cherchye, Laurens & De Rock, Bram & Walheer, Barnabé, 2016. "Multi-output profit efficiency and directional distance functions," Omega, Elsevier, vol. 61(C), pages 100-109.
    7. repec:spr:empeco:v:54:y:2018:i:1:d:10.1007_s00181-016-1180-7 is not listed on IDEAS
    8. Jens J. Krüger, 2017. "Revisiting the world technology frontier: a directional distance function approach," Journal of Economic Growth, Springer, vol. 22(1), pages 67-95, March.
    9. repec:eee:ejores:v:262:y:2017:i:1:p:361-369 is not listed on IDEAS
    10. Krüger, Jens J., 2018. "Direct targeting of efficient DMUs for benchmarking," International Journal of Production Economics, Elsevier, vol. 199(C), pages 1-6.
    11. repec:spr:empeco:v:54:y:2018:i:1:d:10.1007_s00181-016-1204-3 is not listed on IDEAS
    12. Färe, Rolf & Pasurka, Carl & Vardanyan, Michael, 2017. "On endogenizing direction vectors in parametric directional distance function-based models," European Journal of Operational Research, Elsevier, vol. 262(1), pages 361-369.
    13. repec:eee:econom:v:204:y:2018:i:2:p:131-146 is not listed on IDEAS

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