Abstract
DEA (Data Envelopment Analysis) has been widely used to evaluate the operational performance of many organizations in private and public sectors. This study proposes a new use of DEA (or DEA cybernetics) to evaluate the unified (operational and environmental) performance of US coal-fired power plants under the Clean Air Act (CAA). In this study, the economic activities of power plants are characterized by four inputs, a desirable (good) output and three undesirable (bad) outputs. This study uses RAM (Range-Adjusted Model) as our DEA cybernetics model because it can easily incorporate both desirable and undesirable outputs in a unified treatment. The proposed use of DEA cybernetics incorporates a feedback process for environmental performance assessment. This study finds that the CAA has been effective on the enhancement of their unified efficiency.
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