Analysis of environmental efficiency variation : a materials balance approach

Hoang, Viet-Ngu & Nguyen, Trung Thanh (2013) Analysis of environmental efficiency variation : a materials balance approach. Ecological Economics, 86(1), pp. 37-46.

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Abstract

Recent literature has argued that environmental efficiency (EE), which is built on the materials balance (MB) principle, is more suitable than other EE measures in situations where the law of mass conversation regulates production processes. In addition, the MB-based EE method is particularly useful in analysing possible trade-offs between cost and environmental performance. Identifying determinants of MB-based EE can provide useful information to decision makers but there are very few empirical investigations into this issue. This article proposes the use of data envelopment analysis and stochastic frontier analysis techniques to analyse variation in MB-based EE. Specifically, the article develops a stochastic nutrient frontier and nutrient inefficiency model to analyse determinants of MB-based EE. The empirical study applies both techniques to investigate MB-based EE of 96 rice farms in South Korea. The size of land, fertiliser consumption intensity, cost allocative efficiency, and the share of owned land out of total land are found to be correlated with MB-based EE. The results confirm the presence of a trade-off between MB-based EE and cost allocative efficiency and this finding, favouring policy interventions to help farms simultaneously achieve cost efficiency and MP-based EE.

Impact and interest:

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ID Code: 58002
Item Type: Journal Article
Refereed: Yes
Keywords: environmental efficiency, materials balance, nutrient efficiency, nutrient stochastic frontier, single-bootstrap truncated regression
DOI: 10.1016/j.ecolecon.2012.10.014
ISSN: 0921-8009
Subjects: Australian and New Zealand Standard Research Classification > ECONOMICS (140000) > APPLIED ECONOMICS (140200) > Agricultural Economics (140201)
Australian and New Zealand Standard Research Classification > ECONOMICS (140000) > APPLIED ECONOMICS (140200) > Environment and Resource Economics (140205)
Australian and New Zealand Standard Research Classification > ECONOMICS (140000) > OTHER ECONOMICS (149900) > Ecological Economics (149902)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Economics & Finance
Copyright Owner: Copyright 2013 Elsevier
Copyright Statement: This is the author’s version of a work that was accepted for publication in Ecological Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Ecological Economics, [VOL 86 , (2013)] DOI: 10.1016/j.ecolecon.2012.10.014
Deposited On: 11 Mar 2013 03:28
Last Modified: 18 May 2013 06:45

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