Environmentally adjusted productivity and efficiency: a review of concepts, methods and empirical work

Ancev, Tihomir; Azad, Mas; Akter, Mahmuda

doi:10.4337/9781786432421.00006

Cited by 9 publications

(9 citation statements)

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“…There are several possibilities for incorporating the undesirable outputs into a productivity or a TFP measure [9][10][11]: the undesirable outputs can be regarded as inputs and reduced with inputs simultaneously; they can enter the model as weakly disposable outputs; or a costly disposability of the undesirable outputs may be assumed, among others. We follow the latter approach and opt for increasing the desirable outputs and reducing the undesirable ones simultaneously during the optimization within the by-production technology.…”

Section: B Environmental Lhm Indicator and A Novel Decompositionmentioning

confidence: 99%

“…1 Given the environmental considerations raised by such international bodies as the United Nations [7,8], the measurement of green efficiency and productivity growth has become a very topical issue. Therefore, an important effort has been done to extend the measures of productive efficiency and productivity to account for a variety of environmental pressures (see the surveys by [9][10][11]). One of the major concerns underpinning the green productivity growth is ensuring energy Z. Shen is with IÉSEG School of Management, Univ.…”

Section: Introductionmentioning

confidence: 99%

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Economic and Environmental Decomposition of Luenberger-Hicks-Moorsteen Total Factor Productivity Indicator: Empirical Analysis of Chinese Textile Firms With a Focus on Reporting Infeasibilities and Questioning Convexity

Baležentis

Kerstens

Shen

2024

IEEE Trans. Eng. Manage.

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We discuss an environmental Luenberger-Hicks-Moorsteen (LHM) Total Factor Productivity (TFP) indicator and its decomposition that incorporates a negative externality into the measurement of economic performance. Special cases of a generalized environmental directional distance function are involved in the definition of this LHM indicator and its proposed decomposition. We also seek to test whether changes in the convexity assumption provoke differences in the TFP measures. We apply two specifications of the by-production nonparametric environmental technology to implement this LHM TFP. This LHM TFP indicator decomposes into three terms representing technical change, technical inefficiency change, and scale inefficiency change. The changes in the environmental TFP for China's textile industry is then estimated for the period from 2001 to 2010. We report infeasibilities and we show the differences of the proposed framework for the decomposition of the LHM indicator depending on the convexity assumption. The results suggest there has been an increase in the TFP of China's textile industry: the amount depends on the convexity or not of the technology. The environmental performance is poorer than the economic one. Moreover, contradictions between convex and nonconvex LHM indicators for individual observations appear for a substantial part of the sample.

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Section: B Environmental Lhm Indicator and A Novel Decompositionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Economic and Environmental Decomposition of Luenberger-Hicks-Moorsteen Total Factor Productivity Indicator: Empirical Analysis of Chinese Textile Firms With a Focus on Reporting Infeasibilities and Questioning Convexity

Baležentis

Kerstens

Shen

2024

IEEE Trans. Eng. Manage.

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“…This draws on more general methods for incorporating undesirable outputs, along with intended output, into measures of efficiency and productivity. See [29][30][31] for recent reviews of this literature, as well as [32] for a review of environmental adjustments to agricultural TFP specifically.…”

Section: Incorporating Environmental Effects Into Agricultural Tfpmentioning

confidence: 99%

A productivity indicator for adaptation to climate change

Barnhart,

Bostian,

Färe

et al. 2023

PLOS Clim

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This study draws on economic index theory to construct a new indicator for adaptation to changing environmental conditions, most notably climate change, which may shift the production technology over time. Such environmental shifts are largely exogenous to firm decision making, for instance investments in research and development, which may also lead to technology change. Few existing measures of total factor productivity (TFP) make this distinction, between exogenous environmental shifts and shifts due to firm decision making or innovation. We introduce a nonparametric Luenberger productivity indicator for adaptation, which allows for decomposition of standard technology and efficiency change measures into both environmental and production components. We apply this framework to agricultural production in the US Mississippi River Basin for recent decades, working with USDA Census of Agriculture data at the county level and key climate conditions. We also match the production and climate data to estimates of Nitrogen loading over time, to incorporate water quality into the adaptation indicator. Our results indicate sustained overall productivity growth, for both agricultural production and nitrogen loading reductions, driven by technology gains outweighing efficiency losses. Decomposing further to the adaptation component, our results indicate modest overall adaptation gains, driven by both adaptation efficiency and technology gains.

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“…Finally, Freeze and Hironaka (1990) report limited substitution of alfalfa hay and concentrate in beef feeding diets resulting in a forage-concentrate weight gain isoquant that are concave to the origin in the middle range. Despite 1 Surveys on how to model pollutants are available in Dakpo et al (2016), Ancev et al (2017), and Dakpo and Ang (2019).…”

Section: Introductionmentioning

confidence: 99%

“…However, there are theoretical and empirical reasons to question the convexity assumption. Surveys on how to model pollutants are available in Dakpo et al (2016), Ancev et al (2017), and Dakpo and Ang (2019).…”

Section: Introductionmentioning

confidence: 99%

Energy productivity and greenhouse gas emission intensity in Dutch dairy farms: A Hicks–Moorsteen by‐production approach under non‐convexity and convexity with equivalence results

Ang

Kerstens

Sadeghi

2022

J Agricultural Economics

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The agricultural sector is currently confronted with the challenge to reduce greenhouse gas (GHG) emissions, whilst maintaining or increasing production. Energy-saving technologies are often proposed as a partial solution, but the evidence on their ability to reduce GHG emissions remains mixed.Production economics provides methodological tools to analyse the nexus of agricultural production, energy use and GHG emissions. Convexity is predominantly maintained in agricultural production economics, despite various theoretical and empirical reasons to question it. Employing nonconvex and convex frontier frameworks, this contribution evaluates energy productivity change (the ratio of aggregate output change to energy use change) and GHG emission intensity change (the ratio of GHG emission change to polluting input change) using Hicks-Moorsteen productivity formulations. We consider GHG emissions as byproducts of the production process by using a multi-equation model. Given our empirical specification, nonconvex and convex Hicks-Moorsteen indices can coincide under certain circumstances, which leads to a series of theoretical equivalence results. The empirical application focuses on 1,510 observations of Dutch dairy farms for the period of 2010-2019. The results show a positive association between energy productivity change and GHG emission intensity change, which calls into question the potential of on-farm, energy-efficiency-increasing measures to reduce GHG emission intensity.

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Environmentally adjusted productivity and efficiency: a review of concepts, methods and empirical work

Cited by 9 publications

References 0 publications

Economic and Environmental Decomposition of Luenberger-Hicks-Moorsteen Total Factor Productivity Indicator: Empirical Analysis of Chinese Textile Firms With a Focus on Reporting Infeasibilities and Questioning Convexity

Economic and Environmental Decomposition of Luenberger-Hicks-Moorsteen Total Factor Productivity Indicator: Empirical Analysis of Chinese Textile Firms With a Focus on Reporting Infeasibilities and Questioning Convexity

A productivity indicator for adaptation to climate change

Energy productivity and greenhouse gas emission intensity in Dutch dairy farms: A Hicks–Moorsteen by‐production approach under non‐convexity and convexity with equivalence results

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