Environment and economic performance evaluation of 30 provinces and municipalities in China based on a two-stage multiplier DEA approach

Abstract

Data envelopment analysis (DEA) has been widely applied in the performance evaluation of environment or economy recently. If economic and environmental systems exist simultaneously in a decision making unit (DMU), conventional DEA models generally treat the DMU as a black box, and the internal relationship of DMU is often ignored. Thus, the performance of DMUs may be overestimated. In order to solve this problem, a new two-stage multiplier DEA approach is proposed in this paper. The new model can not only obtain the efficiency score of each system, but also consider the intermediate outputs when assessing the overall efficiency of the two systems. In order to test the effectiveness of this approach, a numerical example of 30 provinces in China is illustrated.