A robust network DEA model for sustainability assessment: an application to Chinese Provinces

Abstract

This paper constructs an Environmental Sustainability index in order to investigate regional efficiency in China between 2000 and 2012. The Environmental Sustainability index consists of a Production Efficiency index and an Eco-efficiency index. A multiplicative relational network data envelopment analysis model is applied, and a window analysis is conducted to capture the efficiency trends over time. The results reveal significant heterogeneity among Chinese provinces for the Environmental Sustainability and the Eco-efficiency indices, while there is a high level of Production Efficiency across all provinces. Furthermore, there are large differences among geographical areas. Specifically, high Production Efficiency levels are reported for the eastern area, whereas, high Eco-efficiency levels are reported for the western area. The reported results provide valuable insights to decision makers, revealing a high potential for improvement in the overall Environmental Sustainability score, especially for the eastern and middle areas. In addition, regional heterogeneity should be taken into account when considering new legislation.