This paper presents an efficiency assessment of selected OECD countries using a Slacks Based Model with undesirable or bad outputs (SBM-Undesirable). In this research, SBM-Undesirable is used first in a two-stage approach to assess the relative efficiency of OECD countries using the most frequent indicators adopted by the literature on energy efficiency. Besides, in the second stage, GLMM-MCMC methods are combined with SBMUndesirable results as part of an attempt to produce a model for energy performance with effective predictive ability. The results reveal different impacts of contextual variables, such as economic blocks and capital-labor ratio, on energy efficiency levels.
IntroductionThis paper analyzes the energy efficiency of selected OECD countries using SBM- The paper is structured as follows: The nest Section presents the contextual setting, including a description of the energy sector across the OECD countries under investigation.The literature survey is then presented in Section 3, followed by the SBM-Undesirable methodology Section. Section 5 presents the data and the prediction of efficiency levels using MCMC generalized linear mixed models, followed by the discussion of the results and the conclusion.
Contextual SettingEnergy is one of the major inputs in many production and related processes. Energy is needed in the industrial sector, transportation, street lighting, residential, commercial and government buildings, among others. The demand for energy is rising due to a rising population and the quest for economic growth, which has consequently led to rising energy Due to increasing globalisation and international competitiveness, more emphasis is being placed on reducing production costs, including those related to energy. Moreover, in addition to energy security issues, an increasing cause of concern over the increasing The reason is that energy efficiency is considered as one of the vital strategies to addressing the challenges posed by increasing energy demand (Ang, 2006;Zhou and Ang, 2008). Improving energy efficiency is important from various policy perspectives.Conservation of energy derived from fossil fuels in order to prevent their depletion in the 5 near future is a very crucial objective (Mukherjee, 2008a). Moreover, energy security can be enhanced by improving energy efficiency. Furthermore, reduction in energy use, especially coming from burning fossil fuels, is important for preventing a further deterioration of environmental quality, through increasing CO 2 emissions (Balachandra et al., 2010). Energy efficiency also plays a vital role in achieving the underlying economic objective of cost minimization. For cost effectiveness, it is very important to reduce energy use during periods of high energy prices and also to suitably substitute other inputs for energy (Mukherjee, 2008a). Energy efficiency makes available additional energy resources, which can help in addressing the issues of energy inadequacy or insecurity as well as equity concerns (Balachandra, et al. 2010). Ac...