Pollution‐adjusted productivity analysis: The use of Malmquist and Luenberger productivity measures

Abstract

This paper aims to define pollution‐adjusted Malmquist and Luenberger productivity measures through generalized pollution‐adjusted production technology. This axiomatic framework is fairly weak and does not require any convexity property for the production technology. Hence, a general context to analyse and decompose pollution‐adjusted productivity change is introduced. Decomposing productivity measures allows to determine the sources of productivity variation and is of interest to define recommendations for decision makers.

Environmental productivity assessment: An illustration with the Ecuadorian oil industry

“…The pollution‐adjusted efficiency indices presented in the aforementioned results (i)–(v) fully identify pollution‐generating processes (Abad & Ravelojaona, 2022, 2021). Moreover, remark that efficiency measures (i) and (ii) take the form of hyperbolic distance functions (Färe et al, 1985) whereas (iii), (iv) and (v) are the standard Shephard distance functions (Shephard, 1953).…”

“…In this paper, the performance change assessment of Ecuadorian petroleum companies is performed following the nonconvex pollution‐adjusted Malmquist (PM) and Hicks–Moorsteen (PHM) productivity indices (Abad & Ravelojaona, 2022, 2021). The PM productivity measure takes the form of the Malmquist index (Caves et al, 1982; Färe et al, 1995) while the PHM productivity measure inherits the structure of the HM index (Bjurek, 1996).…”

Energy productivity and greenhouse gas emission intensity in Dutch dairy farms: A Hicks–Moorsteen by‐production approach under non‐convexity and convexity with equivalence results

“…For our partial productivity formulations, this means that one can separately assess aggregate output change and energy use change, on the one hand, and GHG emission change and polluting input change, on the other hand. This is normally not possible using a Malmquist productivity formulation, although Abad and Ravelojaona (2021) demonstrate how to formulate a pollution‐adjusted Malmquist productivity index consisting of a separate polluting productivity index and a separate non‐polluting productivity index. Second, the Hicks‐Moorsteen formulation is not susceptible to infeasibilities under weak conditions on technology (mainly strong disposability), which contrasts with the Malmquist productivity formulation (see Briec and Kerstens (2011)).…”

“…The only alternative theoretical models that use a by‐production framework to model bad outputs in both convex and non‐convex ways are found in Abad and Briec (2019) and Abad and Ravelojaona (2021, 2022). These models are based on recent work to measure strong forms of hypercongestion for convex and non‐convex technologies in Briec et al (2016) who develop a limited form of strong disposability called S ‐disposability (see Briec et al (2018) for an empirical illustration).…”