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A parametric frontier model for measuring eco-efficiency

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  • Orea, Luis
  • Wall, Alan

Abstract

Eco-efficiency has been defined by the OECD as “the efficiency with which ecological resources are used to meet human needs” and can be considered a measure of environmental performance that takes into account both the environmental and economic objectives of firms. Frontier models are an ideal tool for measuring eco-efficiency. While the literature applying frontier models to the empirical measurement of eco-efficiency has been growing steadily in recent years, it has exclusively relied on non-parametric Data Envelopment Analysis (DEA) methods to measure eco-efficiency and its determinants. We propose a parametric Stochastic Frontier (SF) model to measure eco-efficiency, arguing that this has several potential advantages. We provide an empirical application using cross-sectional data from Spanish dairy farms which includes information on environmental and economic indicators as well as a series of potential socio-economic determinants of eco-efficiency.

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  • Orea, Luis & Wall, Alan, 2015. "A parametric frontier model for measuring eco-efficiency," Efficiency Series Papers 2015/02, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    • Handle: RePEc:oeg:wpaper:2015/02
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    References listed on IDEAS

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