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Title: Evaluating eco-efficiency with data envelopment analysis : an analytical reexamination
Authors: Chen, Chien-Ming
Keywords: DRNTU::Business::Operations management
Issue Date: 2013
Source: Chen, C. M. (2014). Evaluating eco-efficiency with data envelopment analysis: an analytical reexamination. Annals of Operations Research, 214(1), 49-71.
Series/Report no.: Annals of operations research
Abstract: This paper reexamines the unintended consequences of the two widely cited models for measuring environmental efficiency—the hyperbolic efficiency model (HEM) and directional distance function (DDF). I prove the existence of three main problems: (1) these two models are not monotonic in undesirable outputs (i.e., a firm’s efficiency may increase when polluting more, and vice versa), (2) strongly dominated firms may appear efficient, and (3) some firms’ environmental efficiency scores may be computed against strongly dominated points. Using the supply-chain carbon emissions data from the 50 major U.S. manufacturing companies, I empirically compare these two models with a weighted additive DEA model. The empirical results corroborate the analytical findings that the DDF and HEM models can generate spurious efficiency estimates and must be used with extreme caution.
ISSN: 0254-5330
DOI: 10.1007/s10479-013-1488-z
Rights: © 2013 Springer Science+Business Media New York. This is the author created version of a work that has been peer reviewed and accepted for publication by Annals of Operations Research, Springer Science+Business Media New York. It incorporates referee’s comments but changes resulting from the publishing process, such as copyediting, structural formatting, may not be reflected in this document. The published version is available at: [].
Fulltext Permission: open
Fulltext Availability: With Fulltext
Appears in Collections:NBS Journal Articles

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