Regional Environmental Quality and Cost Efficiency of International Tourist Hotels in Taiwan

Abstract

The purpose of this study is to compute the cost efficiency of international tourist hotels ( ITHs) in Taiwan and analyze how regional environmental quality affects cost efficiency. The study collects a variety of operating data of international tourist hotels in Taiwan between 1998 and 2009 from the Annual Tourist Hotels Operational Analysis Report, as published by the Tourism Bureau. The data of regional environmental quality are collected from the Taiwan Environment Data Warehouse. This study first uses data envelopment analysis ( DEA) for computing cost efficiency, and then applies the truncated regression to investigate the impact of environmental indicators on cost efficiency. Namely, it is a two-stage DEA-regression method. The empirical results indicate that the density of pungent air pollutants, such as O 3 and SO 2 , have significantly negative impacts on the cost efficiency of ITHs in Taiwan. However, the high volume of waste disposal and low recycling rate reflect a higher business activity intensity in a region, which positively enhances ITHs' cost efficiency.

Cost Efficiency of Portuguese Hotels in the Algarve: A Comparative Analysis Using Mathematical and Econometric Approaches

“…In the hotels sector, using DEA methodology, Tsaur (2001) in Taiwan, Barros and Mascarenhas (2005) and Barros and Santos (2006) in Portugal, Hu et al (2010) in Taiwan, Sigala et al (2005) in the UK, Assaf and Cvelbar (2010) in Slovenia and Yen and Othman (2011) in Malaysia have all studied the levels of TE, AE and CE in their target countries. Further Chen et al (2010) in Taiwan, Pavlyuk (2010) in the Baltic countries and Assaf and Barros (2011) in Angola have investigated the efficiency issue using the SFA methodology. Finally, researchers such as Pulina et al (2010) in Italy, Barros et al (2009) in Portugal and Pérez-Rodríguez and Acosta-González (2007) in Spain have all studied CE , Observation Efficient frontier X1/Output X2/Output using both SFA and DEA.…”

“…Table 3 represents the variables chosen for this study. These variables took into account the data available and most used variables in the literature (such as those presented in Anderson et al (1999), Wang et al (2007), Chen et al (2010 and Assaf et al (2012) for SFA studies and in Tsaur (2001), Hwang and Chang (2003), Chiang et al (2004), Barros and Santos (2006) and Assaf and Cvelbar (2010) for DEA studies).…”