A new slacks-based measure of Malmquist–Luenberger index in the presence of undesirable outputs |
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| Institution: | 1. Department of Economics, Oregon State University and Department of Agricultural and Resource Economics, University of Maryland, USA;2. Faculty of Commerce, Fukuoka University, Japan;3. Department of Economics, Oregon State University, USA and Center for Environmental and Resource Economics (CERE), Sweden;4. School of Economics and Centre for Efficiency and Productivity Analysis (CEPA) at The University of Queensland, 530, Colin Clark Building (39), St Lucia, Brisbane, Qld 4072, Australia;1. School of Economics, China Center for Economic Studies, Fudan University, Shanghai, China;2. Australian Centre on China in the World, College of Asia and the Pacific, Coombs Building, The Australian National University, Canberra, Australia;1. Department of Industrial and Information Management, National Cheng Kung University, Tainan, Taiwan;2. Graduate School of Business and Management, Vanung University, Zhongli District, Taoyuan, Taiwan |
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| Abstract: | In the majority of production processes, noticeable amounts of bad byproducts or bad outputs are produced. The negative effects of the bad outputs on efficiency cannot be handled by the standard Malmquist index to measure productivity change over time. Toward this end, the Malmquist–Luenberger index (MLI) has been introduced, when undesirable outputs are present. In this paper, we introduce a Data Envelopment Analysis (DEA) model as well as an algorithm, which can successfully eliminate a common infeasibility problem encountered in MLI mixed period problems. This model incorporates the best endogenous direction amongst all other possible directions to increase desirable output and decrease the undesirable outputs at the same time. A simple example used to illustrate the new algorithm and a real application of steam power plants is used to show the applicability of the proposed model. |
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| Keywords: | Data Envelopment Analysis Directional Distance Function Eco-Efficiency Change |
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