An alternative probabilistic frontier analysis to the measurement of eco-efficiency

Kounetas, Konstantinos and Polemis, Michael and Tzeremes, Nickolaos (2019): An alternative probabilistic frontier analysis to the measurement of eco-efficiency.

Abstract

This study applies a nonparametric time dependent conditional frontier model to estimate and evaluate the convergence in eco-efficiency of a group of 51 US states over the period 1990-2017. Specifically, we utilize a mixture of global and local pollutants (carbon dioxide CO2, sulphur dioxide SO2 and nitrogen oxides NOx) to capture the environmental damage caused by the anthropogenic activities. The empirical findings indicate divergence for the whole sample, while specific groups of convergence club regions are formulated dividing the US states into worst and best performers. Moreover, Our findings reveal significant convergence patterns between the US regions over the sample period.

• Item Type: MPRA Paper
• Language: English
• Keywords: Eco-efficiency; Convergence clubs; Order-m estimators; Non parametric frontier analysis; US regions
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C15 - Statistical Simulation Methods: General; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q40 - General; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q53 - Air Pollution ; Water Pollution ; Noise ; Hazardous Waste ; Solid Waste ; Recycling; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q57 - Ecological Economics: Ecosystem Services ; Biodiversity Conservation ; Bioeconomics ; Industrial Ecology

References

Apergis, N., Christou, C., and Hassapis, C (2013). Convergence in public expenditures across EU countries: evidence from club convergence. Economics and Finance Research, 1: 45–59.

Camarero, M., Picazo-Tadeo, A.J. and Cecilio, T. (2013a). Are the determinants of CO2 emissions converging among OECD countries? Economics Letters, 118(1): 159-162.

Camarero, M., Castillo, J., Picazo-Tadeo, A., and Tamarit, C. (2013b). Eco-Efficiency and Convergence in OECD Countries, Environmental and Resource Economics, 55(1): 87-106.

Cazals, C., Florens, J. P., and Simar, L. (2002). Nonparametric frontier estimation: a robust approach. Journal of Econometrics, 106(1), 1-25.

Chen, Y., W. D. Cook, N. Li, and J. Zhu. (2009). Additive efficiency decomposition in two-stage DEA. European Journal of Operational Research 196(3): 1170–1176.

Daraio C, Simar L (2007a) Advanced robust and nonparametric methods in efficiency analysis. Springer Science, New York.

Daraio, C., and Simar, L. (2007b). Conditional nonparametric frontier models for convex and nonconvex technologies: a unifying approach. Journal of Productivity Analysis, 28(1-2), 13-32.

Daraio, C., Simar, L., & Wilson, P. W. (2018). Central limit theorems for conditional efficiency measures and tests of the ‘separability’ condition in non‐parametric, two‐stage models of production. Econometrics Journal, 21(2), 170-191.

Deprins D, Simar L, Tulkens H (1984). Measuring labor inefficiency in post offices. In: Marchand M, Pestieau P,

Tulkens H (eds) The performance of public enterprises: concepts and measurements. Amsterdam, North-Holland, 243–267.

Du, K., (2017). Econometric convergence test and club clustering using Stata. The STATA Journal, 17(4): 882-900.

Farrell, M. J. (1957). The measurement of productive efficiency. Journal of the Royal Statistical Society: Series A (General), 120(3), 253-281.

Halkos, G., and Tzeremes, N. (2013). National culture and eco-efficiency: an application of conditional partial nonparametric frontiers, Environmental Economics and Policy Studies, 15(4): 423-441.

Fourier, J.B.J (1878). The analytical theory of heat, Cambridge University Press. London.

Kounetas, K., and Zervopoulos, P. (2019). A cross-country evaluation of environmental performance: Is there a convergence-divergence pattern in technology gaps?, European Journal of Operational Research, 273(3): 1136-1148.

Kortelainen, M. (2008). Dynamic environmental performance analysis: A Malmquist index approach. Ecological Economics 64: 701–715.

Kuosmanen, T., and Kortelainen, M. (2005). Measuring eco‐efficiency of production with data envelopment analysis. Journal of Industrial Ecology, 9(4), 59-72.

Kuosmanen, T. (2005). Measurement and analysis of eco‐efficiency: An economist's perspective. Journal of Industrial Ecology, 9(4), 15-18.

Koopmans TC (1951). An analysis of production as an efficient combination of activities. In: Koopmans TC (ed) Activity analysis of production and allocation, Cowles Commission for Research in Economics, Monograph 13. John-Wiley and Sons Inc, New York.

Picazo-Tadeo AJ, Reig-Martínez E, Gómez-Limón JA. (2011). Assessing farming eco-efficiency: a data envelopment analysis approach. Journal of Environmental Management 92:1154–1164

Quah, D. T. (1996). Convergence empirics across economies with (some) capital mobility. Journal of Economic Growth, 1: 95–124.

Quah, D. T. (1997). Empirics for growth and distribution: stratification, polarization, and convergence clubs. Journal of Economic Growth, 2: 27–59.

Simar, L., and Wilson, P. W. (2011). Two-stage DEA: caveat emptor. Journal of Productivity Analysis, 36(2), 205.