Assessing regional environmental efficiency in China with distinguishing weak and strong disposability of undesirable outputs

Abstract

China has developed a remarkable economic growth in the past 30 years by accompanying with undesirable outputs. The assumptions of weak and strong of undesirable outputs have become the focus discussion in data envelopment analysis (DEA) models. To have a comprehensive environmental efficiency measurement, this paper proposes three DEA models considering weak disposability, strong disposability and distinguishing weak and strong disposability of undesirable outputs, respectively. We further combine with the Malmquist-Luenberger productivity index to assess the environmental efficiency and the dynamic change trend of 30 provinces in China from 2005 to 2014. The results show that distinguishing technical features of undesirable outputs makes a significant difference to final environmental efficiency score at different regions. The environmental efficiency of the whole nation, however, does not show any increasing trend during the ten years. Enhancing environmental efficiency of central and west area is an urgent task for Chinese government. The change trend of Malmquist-Luenberger productivity index and technological change shows a similar shape. Technical progress is the main driving force to enhance the environmental efficiency. Relevant suggestions are presented for improving the regional environmental efficiency in China in the future.