Ángel M. Prieto

Environmental efficiency and regulatory standards: the case of CO2 emissions from OECD industries

Abstract It is generally accepted that production processes should take into account environmental sustainability principles. Hence, any attempt to measure the performance of these processes should highlight, as a reference standard, those processes that combine greater amounts of desirable production with lower levels of undesirable outputs, e.g. waste generation or emissions of greenhouse gases. Using this concept of environmental performance, it is possible to establish efficiency scores within a Data Envelopment Analysis (DEA) framework, and to calculate desirable output losses when specific environmental standards on undesirable production are set by the authority, i.e. legislative opportunity costs. This can be achieved by solving programming models that call for a reduction of undesirable outputs and that stress the weak disposability of such outputs. Once a standard is set, it congests or binds the technology if the reductions in undesirable production required to meet it imply lower desirable output levels, i.e. the regulation is costly. DEA enables us to simulate, for each producer, the effect of any regulatory standard on production, and the limits beyond which production is impossible — lower limits, or superfluous — upper limits, because the chosen standard does not bind production. The empirical implications of the DEA process are analyzed considering different regulatory scenarios on CO2 emissions for the Organization for Economic Cooperation and Development (OECD)s manufacturing industries.

Evaluating Effectiveness in Public Provision of Infrastructure and Equipment: The Case of Spanish Municipalities

Concernabout local government ability to provide public services inan effective way is increasing in Spain as these functions arebeing decentralized from the central to regional governments.The goal of this research is to provide state and local officialswith a decision making tool that allows evaluation of the quantityand quality of the public services--infrastructure and equipment--thatthey are responsible for offering. We characterize performanceamong similar administrative observations, e.g. municipalities,by defining effectiveness improvement strategies--basedon selective funds allocation--that identify and rank thosesectors and variables that present provision deficits and requireprior attention. In order to evaluate provision at the municipalitylevel we define an additive effectiveness measure making useof Data Envelopment Analysis techniques which are enhanced toaccount for the presence of standards. The statistical data arefrom the Spanish Local Infrastructure and Equipment Survey.

Network DEA efficiency in input-output models : With an application to OECD countries

We undertake network efficiency analysis within an input–output model that allows us to assess potential technical efficiency gains by comparing technologies corresponding to different economies. Input–output tables represent a network where different sectoral nodes use primary inputs (endowments) to produce intermediate input and outputs (according to sectoral technologies), and satisfy final demand (preferences). Within the input–output framework it is possible to optimize primary inputs allocation, intermediate production and final demand production by way of non-parametric data envelopment analysis (DEA) techniques. DEA allows us to model the different subtechnologies corresponding to alternative production processes, to assess efficient resource allocation among them, and to determine potential output gains if inefficiencies were dealt with. The proposed model optimizes the underlying multi-stage technologies that the input–output system comprises identifying the best practice economies. The model is applied to a set of OECD countries.

Measuring Productive Efficiency in Input-Output Models by Means of Data Envelopment Analysis

Abstract The goal of the present research is to evaluate productive efficiency in an input–output framework by means of data envelopment analysis (DEA). This mathematical programming technique allows researchers to assess potential efficiency improvements in the form of input requirements reduction. By constructing envelopment unitary isoquants corresponding to comparable sectors across different local, regional or national economies, e.g. agriculture and manufacturing, DEA identifies as productive benchmarks those economies that exhibit the lowest technical coefficients, i.e. lowest input amount to produce one unit of output. Once these reference frontiers have been defined, it is possible to assess what would be the potential efficiency improvements available to the inefficient economies if they were to produce according to the best practice technologies of their benchmark peers. From an equivalent perspective, these simulations identify the necessary changes that each productive sector needs to undertake in order to reach the efficiency levels of the most successful economies. Finally, within Leontief’s analytical construction, these calculations allow us to assess what would have been the economy‐wid,e benefits for the inefficient economies—in terms of intermediate consumption reductions and final demand increases—of producing with best practice technologies. The model is empirically illustrated using the input–output tables for a set of OECD countries.

A new multicriteria approach for the analysis of efficiency in the Spanish olive oil sector by modelling decision maker preferences

The efficiency in production is often analysed as technical efficiency using the production frontier function. Efficiency scores are usually based on distance computations to the frontier in an m+s-dimensional space, where m inputs produce s outputs. In addition, efficiency improvements consider the total consumption of each input. However, in many cases, the “consumption” of each input can be divided into input-consumption sections (ICSs), and trade-off among the ICSs is possible. This share framework can be used for computing efficiency. This analysis provides information about both the total optimal consumption of each input, as does data envelopment analysis, and the most efficient allocation of the “consumption” among the ICSs. This paper studies technical efficiency using this approach and applies it to the olive oil sector in Andalusia (Spain). A non-parametrical methodology is presented, and an input-oriented Multi-Criteria Linear Programming model (MLP) is proposed. The analysis is developed at global, input and ICSs levels, defining the extent of satisfaction achieved at all these levels for each company, in accordance with their own preferences. The companies’ preferences are modelled with their utility function and their set of weights. MLP offers more detailed information to assist decision makers than other models previously proposed in the literature. In addition to this application, it is concluded that there is room for improvement in the olive oil sector, particularly in the management of the skilled labour. Additionally, the solutions with two opposite scenarios indicate that the model is suitable for the intended decision making process.

Multi-output Technical Efficiency in the Olive Oil Industry and Its Relation to the Form of Business Organisation

This work studies the level of technical efficiency in the Andalusian oil industry from a multi-output, non-parametric approach by conducting the data envelopment analysis (DEA) methodology with non-radial distance functions, as well as implementing environmental and non-discretionary variables. The production frontier includes three outputs: quantity and quality of oil production, the outputs to be maximised, and one output to be minimised, the environmental impact of the production process. The inputs are the following: grinded olive, labour, and capital (both fixed and floating). The analysis is carried out by including non-discretionary variables from two points of view. It is considered that the business structure (cooperative or corporation) of the firm affects the frontier (technology). This variable is included through a specific three-stage method. The relation between efficiency and other non-discretionary variables is analysed by the estimation of a Tobit model. Having a sample of 88 oil-mill industries in Andalusia as the starting point, the indices for the two nonconventional outputs in this type of analysis are elaborated; quality is quantified by means of an aggregated index that gathers some aspects related to the separation of olives, critical points, and traceability. The environmental impact is assessed by another index that includes the effects produced on soil, water, air, and sound comfort. From the analysis of results, it can be underlined that, in spite of the fact that the levels of efficiency are high on average, some production adjustments to reduce inputs and the environmental impact of the process could be implemented. The influence of the business structure is significant, and results show that corporations are the most effective ones.