Trade-Offs for the Optimal Energy Efficiency of Road Transportation: Domestic Cases in Developing Countries

Abstract

The increase in domestic transportation in developing countries may adversely affect the energy efficiency of road transportation due to effective productivity and carbon dioxide emissions (CO2). When evaluating quantitatively the countries on the efficiency frontier, poor efficiency can still be seen sometimes due to the slack available in undesirable output measures. This paper uses desirable and undesirable output variables, such as passenger-kilometers (PKM), tones-kilometers (TKM), and carbon dioxide (CO2), to compute the weakly efficient decision-making units (DMUs). The data envelopment analysis (DEA) technology is used to assess the efficiencies of the decision-making units (DMUs), which are countries in our case. Then, the trade-off method with efficient binding surfaces is used to attain the optimal efficiencies of the weakly efficient DMUs. The marginal rates aid this trade-off analysis. Resultantly, such marginal trade-offs do not deteriorate the efficiency of the DMUs below the frontier line. We calculate the maximum change (margin) in a specific variable amount when another variable’s amount is changed. Thus, such a computation gives us different margins, with which each output variable can be a traded off to bring a DMU further toward the closest optimal point possible. The marginal trade-off can help the managers and policymakers in effective decision-making, and it is further recommended to address efficiency damages (by the undesired outputs).