Environmental and Energy Efficiency Analysis of EU Electricity Industry: An Almost Spatial Two Stages DEA Approach

55 Pages Posted: 9 Jul 2019

See all articles by Simona Bigerna

Simona Bigerna

Department of Economics, University of Perugia

Maria Chiara D'Errico

University of Perugia - Department of Economics

Paolo Polinori

University of Perugia - Department of Economics

Date Written: January 10, 2018

Abstract

The relationship between the environmental and energy efficiency and the stringency of environmental and market regulation in the electricity sectors has been analyzed. Using 19 EU countries (2006-2014), the EU environmental index, the OECD regulatory indicators and the total factor productivity (TFP) growth have been decomposed to highlight the complexity of the relations between electricity sector and regulatory policies. In the first stage we compute the three disaggregated TFP components.

These components are used in the second stage to assess the impact of the regulatory policies on the TFP also controlling for spatial effect. Results suggest that market and environmental regulation have not unidirectional impacts on TFP components. Pure and scale efficiency index are negatively affected by sectorial regulation that positively affect the shift of technological frontier.

Environmental policy negatively affects the pure efficiency and the shift of the efficient frontier, but has a positive effect on the scale efficiency.

Keywords: electricity, total factor productivity growth, undesirable output, market and environmental regulation, spatial effect

JEL Classification: C21, L51, L94, O47, Q58

Suggested Citation

Bigerna, Simona and D'Errico, Maria Chiara and Polinori, Paolo, Environmental and Energy Efficiency Analysis of EU Electricity Industry: An Almost Spatial Two Stages DEA Approach (January 10, 2018). Available at SSRN: https://ssrn.com/abstract=3415466 or http://dx.doi.org/10.2139/ssrn.3415466

Simona Bigerna (Contact Author)

Department of Economics, University of Perugia ( email )

Via A. Pascoli
Perugia, 06123
Italy

Maria Chiara D'Errico

University of Perugia - Department of Economics ( email )

via Pascoli, 20
PG 06123 Perugia, 06123
Italy

Paolo Polinori

University of Perugia - Department of Economics ( email )

via A. Pascoli, 20
Perugia, Perugia 06123
Italy
+39 075 5855002 (Phone)
+39 075 5855299 (Fax)

HOME PAGE: http://https://www.unipg.it/personale/paolo.polinori

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