The Measurement of Satisfaction Degree with Controllable and Uncontrollable Based on DEA Approach

Abstract

Data envelopment analysis (DEA) has gained great popularity in environmental performance measurement because it can provide a synthetic, standardized environmental performance index when pollutants are suitably incorporated into the traditional DEA framework. This paper applies the DEA approaches to evaluate the CO2 emission performance and measure its satisfaction degree of 40 countries and regions from 2008 to 2009. We use the input variables of capital, energy consumption and population and the output variables of gross domestic product (GDP) and the amount of fossil-fuel CO2 emissions. Past studies about the application of DEA to environmental performance measurement have not considered uncontrollable factors. In this paper, we present the DEA formulas with controllable and uncontrollable factors to measure environment performance and its satisfaction degree. We first define and construct the environmental production technologies with desirable and undesirable outputs. The degree of environment satisfaction performance based on the DEA approach can be computed by solving a series of data envelopment analysis formulas. A case study of 40 countries and regions applying the DEA approach is also presented.