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A new approach in modelling undesirable output in DEA model

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  • S You

    (The Hong Kong Polytechnic University)

  • H Yan

    (The Hong Kong Polytechnic University)

Abstract

With an increasing attention on the environment, one of the major research thrusts in Data Envelopment Analysis (DEA) based performance evaluation is the undesirable output in the conventional DEA model. There is considerable research published on the undesirable aspects of production outputs. However, the economic implications and the suitability of the DEA models for incorporating the undesirable outputs are less carefully investigated and discussed. In this paper, a comparative study is conducted of typical eco-DEA models to illustrate this issue. We propose a ratio model to evaluate the undesirable as well as the desirable outputs simultaneously. We apply the specially developed model to investigate the impact of production pollutants while conducting the efficiency evaluation in the textile industry of China. The results reveal that the production output-oriented efficiency evaluation can be significantly altered once the environmental aspects are factored into the model.

Suggested Citation

  • S You & H Yan, 2011. "A new approach in modelling undesirable output in DEA model," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(12), pages 2146-2156, December.
    • Handle: RePEc:pal:jorsoc:v:62:y:2011:i:12:d:10.1057_jors.2011.1
    DOI: 10.1057/jors.2011.1
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    9. Cordero, José Manuel & Alonso-Morán, Edurne & Nuño-Solinis, Roberto & Orueta, Juan F. & Arce, Regina Sauto, 2015. "Efficiency assessment of primary care providers: A conditional nonparametric approach," European Journal of Operational Research, Elsevier, vol. 240(1), pages 235-244.
    10. Song, Malin & Song, Yaqing & An, Qingxian & Yu, Huayin, 2013. "Review of environmental efficiency and its influencing factors in China: 1998–2009," Renewable and Sustainable Energy Reviews, Elsevier, vol. 20(C), pages 8-14.
    11. Sheng, Pengfei & Li, Jun & Zhai, Mengxin & Huang, Shoujun, 2020. "Coupling of economic growth and reduction in carbon emissions at the efficiency level: Evidence from China," Energy, Elsevier, vol. 213(C).
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    13. Ma-Lin Song & Yuan-Xiang Zhou & Rong-Rong Zhang & Ron Fisher, 2017. "Environmental efficiency evaluation with left–right fuzzy numbers," Operational Research, Springer, vol. 17(3), pages 697-714, October.
    14. Jomthanachai, Suriyan & Wong, Wai-Peng & Soh, Keng-Lin & Lim, Chee-Peng, 2022. "A global trade supply chain vulnerability in COVID-19 pandemic: An assessment metric of risk and resilience-based efficiency of CoDEA method," Research in Transportation Economics, Elsevier, vol. 93(C).
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