Nonparametric Measures of Efficiency in the Presence of Undesirable Outputs: A By-production Approach with Weak Disposability
In empirical research on productivity measurement adjusted for undesirable outputs on the side, the good and the bad outcomes are treated as joint-products of the underlying production process. In the present paper, following Murty, Russell, and Levkoff, we conceptualize the good output as technologically separable from the bad output. Moreover, we set up an integrated DEA optimization problem over the intersection of these two sub-technologies to measure the efficiency of a firm that produces a bad output alongside the good output. In an empirical illustration of our methodology, we use country level data for an unbalanced panel of 64 countries over the years 1986 through 2011 where per capita GDP is the good and per capita CO2 emission is the bad output. Weak disposability and null jointness is assumed between the bad output and fuel, the polluting input, rather than the good and bad outputs. We then utilize our DEA results to compute opportunity costs of a targeted reduction in CO2 emission in terms of required dollar amounts of reduction in per capita GDP for the individual countries in selected years.
|Date of creation:||Mar 2016|
|Contact details of provider:|| Postal: University of Connecticut 365 Fairfield Way, Unit 1063 Storrs, CT 06269-1063|
Phone: (860) 486-4889
Fax: (860) 486-4463
Web page: http://www.econ.uconn.edu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Murty, Sushama & Russell, R. Robert, 2010.
"On modeling pollution-generating technologies,"
The Warwick Economics Research Paper Series (TWERPS)
931, University of Warwick, Department of Economics.
- Sushama Murty & R. Robert Russell & Steven B. Levkoff, 2011. "On modeling pollution-generating technologies," Discussion Papers 1101, Exeter University, Department of Economics.
- Salnykov Mykhaylo & Zelenyuk Valentin, 2005. "Estimation of environmental efficiencies of economies and shadow prices of pollutants in countries in transition," EERC Working Paper Series 05-06e, EERC Research Network, Russia and CIS.
- Thomas Covert & Michael Greenstone & Christopher R. Knittel, 2016. "Will We Ever Stop Using Fossil Fuels?," Journal of Economic Perspectives, American Economic Association, vol. 30(1), pages 117-138, Winter.
- Thomas Covert & Michael Greenstone & Christopher R. Knittel, 2016. "Will We Ever Stop Using Fossil Fuels?," Working Papers 2016-02, Becker Friedman Institute for Research In Economics.
- Forsund, Finn R., 2009. "Good Modelling of Bad Outputs: Pollution and Multiple-Output Production," International Review of Environmental and Resource Economics, now publishers, vol. 3(1), pages 1-38, August.
- Førsund, Finn R., 2008. "Good Modelling of Bad Outputs: Pollution and Multiple-Output Production," Memorandum 30/2008, Oslo University, Department of Economics.
- Murty, Sushama & Robert Russell, R. & Levkoff, Steven B., 2012. "On modeling pollution-generating technologies," Journal of Environmental Economics and Management, Elsevier, vol. 64(1), pages 117-135.
- Fare, Rolf & Grosskopf, Shawna & Noh, Dong-Woon & Weber, William, 2005. "Characteristics of a polluting technology: theory and practice," Journal of Econometrics, Elsevier, vol. 126(2), pages 469-492, June.
- Rolf Färe & Shawna Grosskopf, 1998. "Shadow Pricing of Good and Bad Commodities," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 584-590.
- 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.
- Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June.
- Chambers, Robert G. & Chung, Yangho & Fare, Rolf, 1996. "Benefit and Distance Functions," Journal of Economic Theory, Elsevier, vol. 70(2), pages 407-419, August. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:uct:uconnp:2016-04. 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: (Mark McConnel)
If references are entirely missing, you can add them using this form.