Using Data Envelopment Analysis for Evaluating Environmental Performance

Joseph Sarkis and Srinivas Talluri

Journal of Environmental Assessment Policy and Management, Vol. 6, No. 1, pp. 91-123, 2004.

Evaluating organizational environmental performance is critical to continuously monitoring and improving processes that have substantial environmental implications. As well, organizations that seek to be both environmentally conscious and profitable need to monitor their situation from a number of perspectives. Studying and managing organizations from this perspective requires an evaluation of eco-efficiency. To aid researchers and managers develop measures for eco-efficiency we review the use of data envelopment analysis (DEA) for this purpose. DEA is a multi-factor productivity analysis tool that has gone through major developmental and application growth. Yet, its use as a tool for environmental performance evaluation has been limited. In this paper we provide a number of DEA models and some extensions and how they can be utilized from both the practitioner and researcher perspective. An illustrative example from published data in the electricity generating industry helps to gain insight into the various models, their capabilities and limitations.


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