sequential tests of the arbitrage pricing theory a comparison of principal components and maximum likelihood factors we examine the cross sectional pricing equation of the apt using the elements of eigenvectors and the maximum likelihood factor loadings of the covariance matrix of returns as measures of risk the results indicate that for data assumed stationary over twenty years the first vector is a surprisingly good measure of risk when compared with either a one or a five factor model or a five vector model we conclude that in some circumstances principal components analysis may be preferred to factor analysis

weak disposability in nonparametric production analysis reply to fare and grosskopf fare and grosskopf this issue claim that a single abatement factor suffices for modeling weak disposability in nonparametric production models and that the kuosmanen 2005 technology that uses multiple abatement factors is larger than necessary this article demonstrates by a numerical example that a single abatement factor does not suffice to capture all feasible production plans and that its use leads to the violation of convexity one of the maintained assumptions of the model we also prove that the kuosmanen technology is the correct minimum extrapolation technology under the stated axioms

a non radial dea approach to measuring environmental performance data envelopment analysis dea has gained great popularity in environmental performance measurement because it can provide a synthetic standardized environmental performance index when pollutants are suitably incorporated into the traditional dea framework past studies about the application of dea to environmental performance measurement often follow the concept of radial efficiency measures in this paper we present a non radial dea approach to measuring environmental performance which consists of a non radial dea based model for multilateral environmental performance comparisons and a non radial malmquist environmental performance index for modeling the change of environmental performance over time a case study of oecd countries using the proposed non radial dea approach is also presented it is found that the environmental performance of oecd countries as a whole has been improved from 1995 to 1997

efficiency analysis for exogenously fixed inputs and outputs we evaluate by means of mathematical programming formulations the relative technical and scale efficiencies of decision making units dmus when some of the inputs or outputs are exogenously fixed and beyond the discretionary control of dmu managers this approach further develops the work on efficiency evaluation and on estimation of efficient production frontiers known as data envelopment analysis dea we also employ the model to provide efficient input and output targets for dmu managers in a way that specifically accounts for the fixed nature of some of the inputs or outputs we illustrate the approach using real data for a network of fast food restaurants

environmental efficiency with multiple environmentally detrimental variables estimated with sfa and dea abstract the objective of this paper is to estimate comprehensive environmental efficiency measures for dutch dairy farms the environmental efficiency scores are based on the nitrogen surplus phosphate surplus and the total direct and indirect energy use of an unbalanced panel of dairy farms we define environmental efficiency as the ratio of minimum feasible to observed use of multiple environmentally detrimental inputs conditional on observed levels of output and the conventional inputs we compare two methods for the calculation of efficiency namely stochastic frontier analysis sfa and data envelopment analysis dea this paper reveals the strengths and weaknesses for estimating environmental efficiency of the methods applied both sfa and dea can estimate environmental efficiency scores the mean technical efficiency scores output oriented sfa 89 dea 78 and the mean comprehensive environmental efficiency scores sfa 80 dea 52 differ between the two methods sfa allows hypothesis testing and the monotonicity hypothesis is rejected for the specification including phosphate surplus dea can calculate environmental efficiency scores for all specifications because regularity is imposed in this method

ecological modernization in the electrical utility industry an application of a bads goods dea model of ecological and technical efficiency abstract newly developed data envelopment analysis techniques permit simultaneous consideration of good and bad outputs in evaluating efficiency we use these techniques to determine joint ecological and technical efficiencies of the 437 largest fossil fueled electricity generating plants in the united states utilizing the epa s e grid and clean air markets databases and drawing on ecological modernization theory we evaluate whether innovations in organizational practices and technological solutions help achieve joint technical and environmental performance efficiencies

efficiency analysis of chinese industry a directional distance function approach two efficiency measures of chinese industry were estimated at the provincial level from 1994 to 2002 using a directional output distance function one is a traditional efficiency measure that considers only desirable output while the other considers both desirable and undesirable outputs simultaneously a comparison of the two measures revealed that efficiency levels are biased only if desirable output is considered five coastal provinces municipalities that have attracted a large amount of foreign direct investment are found to be the most efficient when only desirable output is considered and also when both desirable and undesirable outputs are considered however omitting undesirable output tends to lead to an overestimate of industrial efficiency levels in shandong sichuan and hebei provinces we also found that a province s industrial structure has significant effects on its efficiency levels

nonparametric productivity analysis with undesirable outputs reply hailu and veeman 2001 henceforth hv use both primal nonparametric dea and dual nonparametric frontiers that include undesirable outputs the dual frontier provides the tightest nonparametric outer bound to the unknown underlying technology while the dea frontier provides the tightest innerbound to the technology varian banker and maindiratta chavas and cox all previous nonparametric analyses incorporating undesirable outputs had been based on the dea model and hv highlighted the limitations of this one sided approach by confronting the results from the dea model with those from the dual model the dea model was found to be very poor in terms of discriminating between observations as indicated in hv this is a problem that has also been noted by several other researchers in the conventional productivity literature before i provide specific responses to some of the comments by fare and grosskopf fg i would like to make the following general remarks first hv use input based measures and a variable returns to scale formulation of the dea model however fg support their arguments using output possibility frontiers output based measures and constant returnsto scaleassumptionsthatwerenotusedinhv it is well known that a dea model with constant returns to scale has different characteristics and provides different results compared to those with variable returns second and more importantly it should be noted that the dea model with constant returns to scale does not qualify as the inner nonparametric bound that is the subject of hv s article third the major difference between the weakly disposable and hv dea frontiers becomes irrelevant for measures of efficiency that explicitly penalize extrabadoutput infg sfigure1 forexample the area east of line bc is irrelevant in the hv

a comment on weak disposability in nonparametric production analysis in his 2005 paper in this journal kuosmanen argues that shephard s specification of weak disposability in activity analysis dea models is not correct we show that shephard s specification does satisfy weak disposability and is the smallest technology to do so

alternative measures of environmental technology structure in dea an application abstract the nonparametric data envelopment analysis dea literature on environmental efficiency ee considers handling undesirable outputs in two alternative ways either in their original forms with the assumption that these are weakly disposable or in various translated forms with the assumption that these are strongly disposable choosing a particular approach implies adoption of a particular distinct treatment of undesirable outputs and hence yields a distinct set of ee estimates to explore the effects of the interplay between choice of ee measure and specific treatment of undesirable outputs this paper attempts to generate all possible output oriented ee measures based on these two alternative approaches furthermore guided by the argument that slacks are important in identifying properly the efficiency behavior of firms it proposes two new alternative slacks based formulations of ee one based on the range directional model and the other on the generalized proportional distance function model using a confected data set of ten firms and a real life data set of 22 oecd countries our empirical analysis reveals that first ee scores are influenced not only by the choice of disposability assumption for undesirable outputs but also by the way these are treated in various translated forms second the choice of any particular treatment of undesirable outputs plays no role in influencing the rankings of firms and third our two new alternative ee formulations are at the least viable alternatives to existing ee measures in ranking firms according to their eco efficiency behavior

data envelopment analysis for environmental assessment comparison between public and private ownership in petroleum industry abstract environmental assessment recently becomes a major policy issue in the world this study discusses how to apply data envelopment analysis dea for environmental assessment an important feature of the dea environmental assessment is that it needs to classify outputs into desirable good and undesirable bad outputs because private and public entities often produce not only desirable outputs but also undesirable outputs as a result of their production activities this study proposes the three types of unification for dea environmental assessment by using non radial dea models the first unification considers both an increase and a decrease in the input vector along with a decrease in the direction vector of undesirable outputs this type of unification measures unified efficiency the second unification considers a decrease in an input vector along with a decrease in the vector of undesirable outputs this type of unification is referred to as natural disposability and measures unified efficiency under natural disposability the third unification considers an increase in an input vector but a decrease in the vector of undesirable outputs this type of unification is referred to as managerial disposability and measures unified efficiency under managerial disposability all the unifications increase the vector of desirable outputs to document their practical implications this study has applied the proposed approach to compare the performance of national oil firms with that of international oil firms this study identifies two important findings on the petroleum industry one of the two findings is that national oil companies under public ownership outperform international oil companies under private ownership in terms of unified operational and environmental efficiency and unified efficiency under natural disposability however the performance of international oil companies exhibits an increasing trend in unified efficiency the other finding is that national oil companies need to satisfy the environmental standard of its own country while international oil companies need to satisfy the international standard that is more restricted than the national standards as a consequence international oil companies outperform national oil companies in terms of unified efficiency under managerial disposability

non parametric productivity analysis with undesirable outputs an application to the canadian pulp and paper industry this article extends the chavas cox approach to non parametric analysis by incorporating undesirable outputs to provide a more complete representation of the production technology inner and outer non parametric technology bounds are constructed the methods are illustrated with application to time series data for the canadian pulp and paper industry conventional measures that ignore changes in pollutant outputs underestimate true productivity growth further there is a large gap between estimates generated with reference to inner and outer bounds to the technology suggesting that researchers need to be aware of the limitations of results derived from analyses relying only on dea methods copyright 2001 oxford university press

a kuznets curve in environmental efficiency an application on oecd countries the role of the environment is an important issue in policy making andthe accurate assessment of the environmental conditions is vital inthis paper using nonparametric techniques an environmental efficiencyindex is developed for each of the oecd countries these indexes allowone both to do cross section comparisons on the state of each country sproduction process in its treatment of undesirable outputs and also totrace each country s modification of their production processesovertime furthermore in this study we investigate the factorsunderlying societies environmental concerns that eventually lead tochanges in the environmental efficiency the results provide furtherempirical evidence for the environmental kuznets curve hypothesis

modeling undesirable factors in efficiency evaluation abstract data envelopment analysis dea measures the relative efficiency of decision making units dmus with multiple performance factors which are grouped into outputs and inputs once the efficient frontier is determined inefficient dmus can improve their performance to reach the efficient frontier by either increasing their current output levels or decreasing their current input levels however both desirable good and undesirable bad factors may be present for example if inefficiency exists in production processes where final products are manufactured with a production of wastes and pollutants the outputs of wastes and pollutants are undesirable and should be reduced to improve the performance using the classification invariance property we show that the standard dea model can be used to improve the performance via increasing the desirable outputs and decreasing the undesirable outputs the method can also be applied to situations when some inputs need to be increased to improve the performance the linearity and convexity of dea are preserved through our proposal

multilateral productivity comparisons when some outputs are undesirable a nonparametric approach multilateral productivity comparisons of firms producing multiple outputs some of which are undesirable are obtained by making two modifications to the standard farrell approach to efficiency measurement the restriction that production technology satisfy strong disposability of outputs is relaxed to allow for the fact that undesirable outputs may be freely disposable and the efficiency measures are modified to allow for an asymmetric treatment of desirable and undesirable outputs performance measures that satisfy these requirements are calculated as solutions to programming problems the methodology is applied to a sample of mills producing paper and pollutants

ekc analysis for studying economic growth and environmental quality a case study in china compared with the extensive research on the relationship between economic growth and environmental quality in developed countries there is a paucity of an empirical research on studying the relation for developing countries based upon the environmental kuznets curve ekc theory this paper develops regression models for investigating the relationship between economic growth and environmental quality in china the ekc analysis based on six pollution indices is illustrated with a case study in jiaxing of zhejiang china

are there increasing returns to pollution abatement empirical analytics of the environmental kuznets curve in pesticides abstract according to the environmental kuznets curve ekc hypothesis economic growth and the reduction of environmental degradation are compatible goals an inverted u shaped relationship between economic performance and environmental pollution suggests that empirically an economy is associated with smaller levels of pollution after some threshold income point one potential explanation for the empirical evidence of an ekc is increasing returns to pollution abatement where the abatement efficiency rises with an increase in the scale of abatement doubling the clean up efforts more than doubles the abatement of pollution as this efficiency gain makes abatement less expensive pollution might fall as more abatement is undertaken this study tests the hypothesis that there are increasing returns to abating pollution empirical evidence on environmental risks in the us agricultural sector since 1970 support the existence of increasing returns in addition i estimate the productivity of pollution abatement using refined empirical productivity measurement methods and explicitly control the level of technology the results show the importance of including an environmental productivity variable in the ekc framework

a conditional directional distance function approach for measuring regional environmental efficiency evidence from uk regions abstract this paper by using conditional directional distance functions as introduced by simar and vanhems j econometrics 166 2012 342 354 modifies the model by fare and grosskopf eur j operat res 157 2004 242 245 and examines the link between regional environmental efficiency and economic growth the proposed model using conditional directional distance functions incorporates the effect of regional economic growth on regions environmental efficiency levels the results from uk regional data reveal a negative relationship between regions gdp per capita and environmental inefficiency up to a certain gdp per capita level after that level it appears that the relationship becomes positive as an overall result the regional environmental inefficiency gdp per capita relationship appears to have a u shape form

total factor energy efficiency in developing countries this paper uses a total factor framework to investigate energy efficiency in 23 developing countries during the period of 1980 2005 we explore the total factor energy efficiency and change trends by applying data envelopment analysis dea window which is capable of measuring efficiency in cross sectional and time varying data the empirical results indicate that botswana mexico and panama perform the best in terms of energy efficiency whereas kenya sri lanka syria and the philippines perform the worst during the entire research period seven countries show little change in energy efficiency over time eleven countries experienced continuous decreases in energy efficiency among five countries witnessing continuous increase in total factor energy efficiency china experienced the most rapid rise practice in china indicates that effective energy policies play a crucial role in improving energy efficiency tobit regression analysis indicates that a u shaped relationship exists between total factor energy efficiency and income per capita

efficiency assessment of primary care providers a conditional nonparametric approach this paper uses a fully nonparametric approach to estimate efficiency measures for primary care units incorporating the effect of exogenous environmental factors this methodology allows us to account for different types of variables continuous and discrete describing the main characteristics of patients served by those providers in addition we use an extension of this nonparametric approach to deal with the presence of undesirable outputs in data represented by the rates of hospitalization for ambulatory care sensitive condition acsc the empirical results show that all the exogenous variables considered have a significant and negative effect on efficiency estimates

searching for a kuznets curve in environmental efficiency using kernel estimation abstract the paper constructs environmental efficiency indexes for a sample consisting of high and low income countries using nonparametric production frontier techniques and then establishes an environmental kuznets relationship for environmental efficiency by nadaraya watson kernel estimation methodology

the influence of public subsidies on farm technical efficiency a robust conditional nonparametric approach the objective of this paper is to assess the influence of public subsidies on farm technical efficiency using recent advances in nonparametric efficiency analysis to this end we use robust conditional frontier techniques as well as insights from recent developments in nonparametric econometrics the paper contributes to the ongoing methodological discussion on how to model the effect of public subsidies on farmers production decisions the analysis is conducted using an unbalanced panel data of 1604 observations from 313 french farms located in the french region meuse over the period 2006 2011 the estimates indicate that public subsidies influence negatively the conditional technical efficiency of farms this suggests that public subsidies affect both the range of the attainable set for the inputs and outputs and the distribution of the efficiency scores inside the attainable set

a robust nonparametric approach to evaluate and explain the performance of mutual funds the topic of the measurement of mutual funds performance is receiving an increasing interest both from an applied and a theoretical perspective beside the traditional financial literature a growing body of studies has started to apply the tools of frontier analysis for benchmarking comparisons in portfolio analysis our paper contributes to this literature proposing a robust nonparametric approach for analysing mutual funds it is based on the concept of order m frontier cazals c florens j p simar l 2002 nonparametric frontier estimation a robust approach journal of econometrics 106 1 25 and on a probabilistic approach daraio c simar l 2005 introducing environmental variables in nonparametric frontier models a probabilistic approach journal of productivity analysis 24 1 93 121 to find out the factors explaining mutual funds performance within this framework a decomposition of conditional efficiency is proposed and its usefulness for economic interpretation analysed our approach is illustrated by using us mutual funds data grouped for category by objective economies of scale slacks and market risks are investigated a comparison of traditional nonparametric and robust performance measures is also offered

exploring the existence of kuznets curve in countries environmental efficiency using dea window analysis abstract this paper using data envelopment dea window analysis and generalized method of moments gmm estimators examines the existence of a kuznets type relationship between countries environmental efficiency and national income specifically it measures the environmental efficiency of 17 oecd countries by constructing environmental efficiency ratios for the time period 1980 2002 the analysis with the application of dynamic panel data reveals that there isn t a kuznets type relationship between environmental efficiency and income allowing for dynamic effects we find that the adjustment to the target ratio is instantaneous we also find that increased economic activity does not always ensure environmental protection and thus the path of growth is important in addition to the growth itself

environmental productivity and kuznets curve in india abstract as a result of india s extremely rapid economic growth the scale and seriousness of environmental problems are no longer in doubt whether pollution abatement technologies are utilized more efficiently is crucial in the analysis of environmental management because it influences the cost of alternative production and pollution abatement technologies in this study we use state level industry data of sulfur dioxide nitrogen dioxide and suspended particular matter over the period 1991 2003 employing recently developed productivity measurement technique we show that overall environmental productivities decrease over time in india furthermore we analyze the determinants of environmental productivities and find environmental kuznets curve type relationship existences between environmental productivity and income panel analysis results show that the scale effect dominates over the technique effect therefore a combined effect of income on environmental productivity is negative

weak disposability in nonparametric production analysis with undesirable outputs environmental economics and natural resources group at wageningen university in the netherlands weak disposability of outputs means that firms can abate harmful emissions by decreasing the activity level modeling weak disposability in nonparametric production analysis has caused some confusion this article identifies a dilemma in these approaches conventional formulations implicitly and unintentionally assume all firms apply uniform abatement factors however it is usually cost effective to abate emissions in those firms where the marginal abatement costs are lowest this article presents a simple formulation of weak disposability that allows for non uniform abatement factors and preserves the linear structure of the model

social responsiveness profitability and catastrophic events evidence on the corporate philanthropic response to 9 11 in this study we seek to determine whether catastrophic events lead to corporate charitable giving unrelated to levels of firm profitability we examine the issue relative to the corporate philanthropic response to the 9 11 terrorist attacks of 2001 based on a sample of 489 fortune 500 companies we find that differences in the extent of corporate contributions following 9 11 are positively and significantly associated with differences in firms profitability further while the degree of connection to the catastrophic event led to higher levels of giving in comparison to the contributions of less connected firms differences in the extent of philanthropy are still related to short term profitability for the more connected firms the study thus provides evidence suggesting that even in the wake of catastrophic events corporate philanthropic giving is constrained by economic concerns

population economic growth and regional environmental inefficiency evidence from u s states we apply a conditional directional distance function allowing multiple exogenous factors to measure environmental performance we evaluate the air pollution performance levels of u s states for the years 1998 and 2008 states environmental inefficiency is determined by population size and gdp per capita gdppc the overall results reveal that there is much variation in environmental inefficiencies among the u s states a second stage nonparametric analysis indicates a nonlinear relationship between states population size gdppc levels and states environmental inefficiency levels our results indicate that environmental inefficiency on the whole decreases with increased population and income per capita but there are limits to this improvement and at high income and population levels the tendency may reverse

an activity analysis model of the environmental performance of firms application to fossil fuel fired electric utilities the productivity of firms when some outputs pollution are undesirable has been studied in the literature for some time in this paper we introduce an environmental performance indicator based on the decomposition of overall factor productivity into a pollution index and an input output efficiency index this indicator is compared to the more conventional jaggi and freedman 1992 model results are given for illustrative purposes using data from u s fossil fuel fired electric utilities the rankings of the utilities obtained with the two models show significant divergence which is due to the different ways in which the undesirable outputs are dealt with as well as due to the different possible tradeoffs between the pollutants released into the atmosphere and the resources used as inputs

slacks based efficiency measures for modeling environmental performance we develop two slacks based efficiency measures for modeling environmental performance on the basis of environmental dea technology of the two measures one is a composite index with a higher discriminating power for modeling economic environmental performance and the other can be used to estimate the impacts of environmental regulations we apply the proposed measures to model the co2 emissions of 30 oecd countries from 1998 to 2002 and present the results obtained

eco efficiency analysis of power plants an extension of data envelopment analysis abstract in public discussion on environmental policy the notion of eco efficiency is often used the joint production of goods and undesirable outputs such as pollutants which may not be freely disposable without costs causes difficulties to measure the overall performance of the firm because of the absence of market prices for the undesirable outputs we are not able to estimate the environmental costs some of the measurement and evaluation difficulties can be overcome by employing data envelopment analysis dea as the efficiency measurement vehicle we propose the use of two different approaches in the first approach we start by decomposing the problem into two parts 1 the problem of measuring technical efficiency as the relation of the desirable outputs to the inputs and 2 the problem of measuring so called ecological efficiency as the relation of the desirable outputs to the undesirable outputs separately those two efficiency indicators are then combined in the second approach we treat pollutants as the inputs in the sense that we wish to increase desirable outputs and decrease pollutants and inputs the approaches are applied to the problem of measuring the efficiency of 24 power plants in a european country