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Measuring Eco‐efficiency of Production with Data Envelopment Analysis
Author(s) -
Kuosmanen Timo,
Kortelainen Mika
Publication year - 2005
Publication title -
journal of industrial ecology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.377
H-Index - 102
eISSN - 1530-9290
pISSN - 1088-1980
DOI - 10.1162/108819805775247846
Subject(s) - data envelopment analysis , production (economics) , index (typography) , normative , environmental economics , substitution (logic) , eco efficiency , economics , econometrics , computer science , environmental resource management , operations research , sustainability , statistics , microeconomics , mathematics , ecology , philosophy , epistemology , world wide web , programming language , biology
Summary Aggregation of environmental pressures into a single environmental damage index is a major challenge of eco‐efficiency measurement. This article examines how the data envelopment analysis (DEA) method can be adapted for this purpose. DEA accounts for substitution possibilities between different natural resources and emissions and does not require subjective judgment about the weights. Although DEA does not require subjective or normative judgment, soft weight restrictions can be incorporated into the framework. The proposed approach is illustrated by an application to assessing ecoefficiency of road transportation in the three largest towns of eastern Finland.