Measuring ecological efficiency with data envelopment analysis

Measuring ecological efficiency with data envelopment analysis

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Article ID: iaor20021753
Country: Netherlands
Volume: 132
Issue: 2
Start Page Number: 312
End Page Number: 325
Publication Date: Jul 2001
Journal: European Journal of Operational Research
Authors: ,
Keywords: statistics: data envelopment analysis
Abstract:

The measurement of ecological efficiency provides some important information for the companies' environmental management. Ecological efficiency is usually measured by comparing environmental performance indicators. Data envelopment analysis (DEA) shows a high potential to support such comparisons, as no explicit weights are needed to aggregate the indicators. In general, DEA assumes that inputs and outputs are ‘goods’, but from an ecological perspective also ‘bads’ have to be considered. In the literature, ‘bads’ are treated in different and sometimes arbitrarily chosen ways. This article aims at the systematic derivation of ecologically extended DEA models. Starting from the assumptions of DEA in production theory and activity analysis, a generalisation of basic DEA models is derived by incorporating a multi-dimensional value function f. Extended preference structures can be considered by different specifications of f, e.g. specifications for ecologically motivated applications of DEA.

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