Environmental externalities and efficiency measurement

Production of desirable outputs often produces by-products that have harmful effects on the environment. This paper investigates technologies where the biggest good output producer is not the greatest polluter, i.e. technologies located on the downward-sloping segment of the frontier depicted in Fär...

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Bibliographic Details
Published in:Journal of environmental management 2009-08, Vol.90 (11), p.3332-3339
Main Authors: Picazo-Tadeo, Andrés J., Prior, Diego
Format: Article
Language:English
Subjects:
Algorithms
Animal, plant and microbial ecology
Applied ecology
Biological and medical sciences
By-products
Byproducts
Ceramic industry
Ceramics
Conservation, protection and management of environment and wildlife
Constraining
Data envelopment analysis
Efficiency measurement
Empirical analysis
Environmental effects
Environmental efficiency
Environmental externalities
Environmental management
Environmental Monitoring - methods
Externalities
Fundamental and applied biological sciences. Psychology
General aspects
Industrial production
Industrial wastes
Models, Theoretical
Output rate
Pollution
Segments
Spain
Tiles
Waste disposal
Wastes
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Summary:Production of desirable outputs often produces by-products that have harmful effects on the environment. This paper investigates technologies where the biggest good output producer is not the greatest polluter, i.e. technologies located on the downward-sloping segment of the frontier depicted in Färe et al. (1989). Directional distance functions and Data Envelopment Analysis techniques are used to define an algorithm that allows them to be identified empirically. Furthermore, we show that in such situations producers can contribute social goods, i.e. reducing polluting wastes, without limiting their capacity to maximise production of marketable output. Finally, we illustrate our methodology with an empirical application to a sample of Spanish ceramic tile producers.
ISSN:0301-4797
1095-8630
DOI:10.1016/j.jenvman.2009.05.015