Shadow pricing of undesirable outputs in nonparametric analysis

Leleu, Hervé

doi:10.1016/j.ejor.2013.05.028

Cited by 104 publications

(48 citation statements)

References 53 publications

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“…Leleu [1] provided an economic interpretation of this model. Constraint set (4.1) states that the difference between the profit of any Unit j and the unit being evaluated, which is the profit inefficiency, must be less than or equal to ϕ, and the objective function (4.0) is to find the minimum profit inefficiency ϕ of the focal unit.…”

Section: Ratio Modelmentioning

confidence: 99%

“…Following the notation of the extended BCC model, the model proposed by Leleu [1], in what he called dual form, can be formulated as: …”

Section: Ratio Modelmentioning

confidence: 99%

“…This model is shown to be a ratio-measure counterpart of the difference-measure model of Leleu [1], maintaining the strengths of this while in a simpler form. Moreover, the ratio-measure of efficiency used in this work, in the range of zero and one, provides a better idea of the relative performance of a production unit than the difference-measure, in the range of zero and an unknown upper bound, does.…”

Section: Introductionmentioning

confidence: 99%

“…How to appropriately measure the efficiency of a production unit that produces both desirable and undesirable outputs using the data envelopment analysis (DEA) technique has also attracted numerous studies. Leleu [1] reviewed many articles on the modeling of undesirable outputs, highlighted some problems that can arise, and proposed a model that avoids these. This model also provides an economic interpretation of the production process.…”

Section: Introductionmentioning

confidence: 99%

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Negative valuation of undesirable outputs in evaluating the efficiency of production systems

Kao

2017

MATEC Web Conf.

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Abstract. This paper extends a data envelopment analysis (DEA) model that considers only desirable outputs in measuring efficiencies to incorporate undesirable outputs by requiring the associated multipliers to be negative. It is shown that the proposed model is the ratio-measure counterpart of the difference-measure model existed in the literature. It has the technology of variable returns to scale, and the modification made to it means that it also has the property of null-jointness, satisfies the axiom of weak disposability, and has positive shadow prices, considered as pitfalls in modeling undesirable outputs. In addition to the economic interpretation, the ratio-measure of efficiency of the proposed model better shows the relative performance of a unit than the difference-measure does, and its simpler form also provides a clearer geometric interpretation of efficiency measurement with undesirable outputs.

show abstract

Section: Ratio Modelmentioning

confidence: 99%

“…Following the notation of the extended BCC model, the model proposed by Leleu [1], in what he called dual form, can be formulated as: …”

Section: Ratio Modelmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Negative valuation of undesirable outputs in evaluating the efficiency of production systems

Kao

2017

MATEC Web Conf.

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“…Hence, this anti-fact situation must be improved. We improvedP K pxq toP New pxq according to a suggestion made by Leleu [55], and set strong disposability on undesirable output, makingP New pxq satisfies two necessary assumptions. The success of doing so is evidenced by piecewise horizontal lines on the right side of line BC inP New pxq, which can avoid the positive shadow price emerging on undesirable output.…”

Section: Andmentioning

confidence: 99%

Optimal Path for Controlling Sectoral CO2 Emissions Among China’s Regions: A Centralized DEA Approach

2015

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This paper proposes a centralized data envelopment analysis (DEA) model for industrial optimization based on several different production technologies among several regions. We developed this model based on improved Kuosmanen environmental DEA technology, which avoids positive shadow price on undesirable outputs. We also designed a dual model for our centralized DEA model, and used it to analyze shadow prices on CO 2 emissions. We further employed the proposed model to determine the optimal path for controlling CO 2 emissions at the sector level for each province in China. At sectoral level, manufacturing showed the highest potential emissions reduction, and transportation was the largest accepter of emission quotas. At regional level, western and northeastern areas faced the largest adjustments in allowable emissions, while central and eastern areas required the least amount of adjustment. Because our model represents increase or decrease in emissions bidirectionally in terms of shadow price analysis, this setting makes the shadow price on CO 2 emissions lower than strong regulation (decreasing CO 2 emissions along with increasing value added) used by directional distance function (DDF).

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Environmental, social, and governance, firm performance and the moderating role of power distance cultural value during the COVID‐19 pandemic

Lu,

Kweh,

Dashnyam

2024

Bus Strat Env

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We examine the association between environmental, social, and governance (ESG) and firm performance, taking into account the influence of power distance (PD) cultural orientation among 38 leading technology‐driven global companies between 2017 and 2021. First, we establish an internal network structure through a chance‐constrained network data envelopment analysis (NDEA) model to analyze the R&D investment and eco‐business efficiencies of our sample companies. Among the average DEA score results, eco‐business efficiencies performed better with after COVID‐19 than R&D investment performance. Second, we conduct a truncated regression analysis and find that PD positively (negatively) moderates the impact of social (environmental and governance) factors on R&D investment efficiency (eco‐business efficiency). Overall, we highlight strategic ESG toward their sustainability business success and underline the specific NDEA application in assessing the efficiencies of innovative industries.

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Shadow pricing of undesirable outputs in nonparametric analysis

Cited by 104 publications

References 53 publications

Negative valuation of undesirable outputs in evaluating the efficiency of production systems

Negative valuation of undesirable outputs in evaluating the efficiency of production systems

Optimal Path for Controlling Sectoral CO2 Emissions Among China’s Regions: A Centralized DEA Approach

Environmental, social, and governance, firm performance and the moderating role of power distance cultural value during the COVID‐19 pandemic

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