Applying an Efficiency Measure of Desirable and Undesirable Outputs in DEA to U.S. Electric Utilities

14 Pages Posted: 23 Sep 2011 Last revised: 30 Oct 2012

See all articles by Kaoru Tone

Kaoru Tone

National Graduate Institute for Policy Studies (GRIPS)

Miki Tsutsui

Central Research Institute of Electric Power

Date Written: September 21, 2011

Abstract

The measure proposed in this paper is a new nonparametric data envelopment analysis (DEA) scheme, the hybrid measure, for determining efficiency in the presence of radial and nonradial inputs or outputs. Further extension of the scheme occurred to address nonseparable desirable and undesirable outputs. Applying the model to measure the overall efficiency of U.S. electric utilities in the presence of both desirable and undesirable outputs indicated that the utilities had improved their overall management and environmental efficiency between 1996 and 2000.

Keywords: Hybrid measure, radial, nonradial, environmental factors, undesirable outputs, nonseparable outputs, U.S. electric utilities, DEA

JEL Classification: C67, D24, Q56

Suggested Citation

Tone, Kaoru and Tsutsui, Miki, Applying an Efficiency Measure of Desirable and Undesirable Outputs in DEA to U.S. Electric Utilities (September 21, 2011). Journal of CENTRUM Cathedra: The Business and Economics Research Journal, Vol. 4, Issue 2, pp. 236-249, 2011, Available at SSRN: https://ssrn.com/abstract=1931857

Kaoru Tone (Contact Author)

National Graduate Institute for Policy Studies (GRIPS) ( email )

7-22-1 Roppongi, Minato-Ku
Tokyo 106-8677, Tokyo 106-8677
Japan

Miki Tsutsui

Central Research Institute of Electric Power ( email )

Chiyoda-ku
Tokyo, 100-8126
Japan

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