A Study of Total-Factor Energy Efficiency for Regional Sustainable Development in China: An Application of Bootstrapped DEA and Clustering Approach

Abstract

Total-factor energy efficiency (TFEE) is widely used to measure energy efficiency under the data envelopment analysis (DEA) framework, but the efficiencies obtained from DEA are structurally biased upward, and thus TFEE tends to overestimate energy efficiency. This research thus applies the bootstrapped DEA approach to correct the bias of TFEE. Using a dataset consisting of 30 provinces of China in the period 2016–2019, the bootstrapped-based test supports technology with variable returns to scale. The biased-corrected TFEE also indicates that energy consumption on average can be scaled down by 42.36%, rather than the biased value of 19.4%. The bootstrapped clustering partitions provinces into three groups: Cluster 1, with Guizhou as the representative medoid, includes half of the superior coastal provinces in terms of actual energy consumption and TFEE and half of the competitive inland provinces, whereas Cluster 3 outperforms Cluster 2 in terms of TFEE, but the actual energy consumption is higher, with Shandong and Hebei as the representative medoids, respectively. Lastly, empirical results imply that the northeast and central regions need more government attention and resources to practice sustainable development and improve TFEE.