Skip to main content
SpringerLink
Log in

Linear Programming Models for the Measurement of Environmental Performance of Firms—Concepts and Empirical Results

  • Published:
Journal of Productivity Analysis Aims and scope Submit manuscript

Abstract

I use linear programming models to define standardised, aggregate environmental performance indicators for firms. The best practice frontier obtained corresponds to decision making units showing the best environmental behaviour. Results are obtained with data from U.S. fossil fuel-fired electric utilities, starting from four alternative models, among which are three linear programming models that differ in the way they account for undesirable outputs (pollutants) and resources used as inputs. The results indicate important discrepancies in the rankings obtained by the four models. Rather than contradictory, these results are interpreted as giving different, complementary kinds of information, that should all be taken into account by public decision-makers.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Azzone, Giovanni and Raffaella Manzini. (1994). “Measuring Strategic Environmental Performance.” Business Strategy and the Environment 3(1), 1–14.

    Google Scholar 

  • Ball, V. Eldon, C. A. Knox Lovell, Richard F. Nehring, and Agapi Somwaru. (1994). “Incorporating Undesirable Outputs into Models of Production: An Application to U.S. Agriculture.” Cahiers d'Économie et Sociologie Rurales 31, 60–74.

    Google Scholar 

  • Callens, Isabelle and Daniel Tyteca. (1995). “Towards Indicators of Sustainable Development for Firms—Concepts and Definitions.” Communication to the Fourth International Research Conference of the Greening of Industry Network, “Learning to Build Sustainable Industries for Sustainable Societies,” Toronto, Ontario, Canada, November 12–14, 1995, Submitted.

  • Charnes, A., W. W. Cooper, and E. Rhodes. (1978). “Measuring the Efficiency of Decision Making Units.” European Journal of Operational Research 2, 429–444.

    Google Scholar 

  • Connier, Denis, Michel Magnan, and Bernard Morard. (1993). “The Impact of Corporate Pollution on Market Valuation: Some Empirical Evidence.” Ecological Economics 8, 135–155.

    Google Scholar 

  • Devuyst, Dimitri. (1993). “Environmental Impact Assessment.” In B. Nath, L. Hens, and D. Devuyst (eds.), Environmental Management, Vol. 3: Instruments for Implementation. Brussels: VUB Press, chap. 6, 145–175.

    Google Scholar 

  • EIA-U.S. Energy Information Administration. (1993). Electric plant cost and power production expenses 1991. DOE/EIA-0455(91), U.S. Department of Energy, Washington, DC.

    Google Scholar 

  • Färe, Rolf. (1992). “Productivity Gauging with Undesirable Outputs.” Mimeo, Southern Illinois University.

    Google Scholar 

  • Färe, Rolf, Shawna Grosskopf, C. A. Knox Lovell, and Carl A. Pasurka, Jr. (1989). “Multilateral Productivity Comparisons When Some Outputs are Undesirable: a Nonparametric Approach.” Review of Economics and Statistics 71, 90–98.

    Google Scholar 

  • Färe, Rolf, Shawna Grosskopf, C. A. Knox Lovell, and Suthathip Yaisawarng. (1993). “Derivation of Shadow Prices for Undesirable Outputs: A Distance Function Approach.” Review of Economics and Statistics 75, 374–380.

    Google Scholar 

  • Färe, Rolf, Shawna Grosskopf, and Daniel Tyteca. (1996). “An Activity Analysis Model of the Environmental Performance of Firms—Application to Fossil Fuel-fired Electric Utilities.” Ecological Economics 18, 161–175.

    Google Scholar 

  • Haynes, Kingslcy E., Samuel Ratick, and James Cummings-Saxton. (1994). “Toward a Pollution Abatement Monitoring Policy: Measurements, Model Mechanics and Data Requirements.” Environmental Professional 16, 292–303.

    Google Scholar 

  • Jaggi, Bikki and Martin Freedman. (1992). “An Examination of the Impact of Pollution Performace on Economic and Market Performance: Pulp and Paper Firms.” Journal of Business Finance and Accounting 19, 697–713.

    Google Scholar 

  • James, Peter. (1994). “Business Environmental Performance Measurement.” Business Strategy and the Environment 3(2), 59–67.

    Google Scholar 

  • James, Peter and Martin Bennett. (1994). “Environment-Related Performance Measurement in Business—From Emissions to Profit and Sustainability?” Research Report AMRG 946, Ashridge Management Research Group, Herts (U.K.).

    Google Scholar 

  • Kirkpatrick, Neil. (1993). “Selecting a Waste Management Option Using a Life Cycle Analysis Approach.” Packaging Technology and Science 6, 159–172.

    Google Scholar 

  • Lovell, C. A. Knox. (1993). “Production Frontiers and Productive Efficiency.” In Harold O. Fried, C. A. Knox Lovell, and Shelton S. Schmidt (eds.). The Measurement of Productive Efficiency. Oxford: Oxford Univ. Press, 3–67.

    Google Scholar 

  • Martin, Paul, David Wheeler, Mala Hettige, and Ralph Stengren. (1991). “The Industrial Pollution Projection System: Concept, Initial Development and Critical Assessment.” World Bank, Discussion paper, October 1991.

  • Nestor, Deborah Vaughn and Carl A. Pasurka, Jr. (1993). “Measuring Progress in Pollution Prevention Using Frontier Production Functions: A Preliminary Assessment.” Discussion paper, Environmental Protection Agency, Washington, DC.

    Google Scholar 

  • Pearce, David W. and Giles D. Atkinson. (1993). “Capital Theory and the Measurement of Sustainable Development: An Indicator of ‘Weak’ Sustainability.” Ecological Economics 8, 103–108.

    Google Scholar 

  • Rice, Faye. (1993). “Who Scores Best on the Environment.” Fortune July 26, 114–122.

    Google Scholar 

  • Seiford, Lawrence M. and Robert M. Thrall. (1990). “Recent Developments in DEA—The Mathematical Programming Approach to Frontier Analysis.” Journal of Econometrics 46, 7–38.

    Google Scholar 

  • Thiry, Bernard and Henry Tulkens. (1992). “Allowing for Inefficiency in Parametric Estimation of Production Functions for Urban Transit Firms.” Journal of Productivity Analysis 3, 45–65.

    Google Scholar 

  • Tulkens, Henry. (1993). “On FDH Efficiency Analysis: Some Methodological Issues and Applications to Retail Banking, Courts, and Urban Transit.” Journal of Productivity Analysis 4, 183–210.

    Google Scholar 

  • Tyteca, Daniel. (1996). “On the Measurement of Environmental Performance in Firms—A Literature Review and a Productive Efficiency Perspective.” Journal of Environmental Management, 46, 281–308.

    Google Scholar 

  • Wehrmeyer, Walter (1993). “The Scientific Measurement of Environmental Performance.” Paper presented to ESRC workshop on Environmental Performance Measurement and Reporting, University of Wolverhampton (U.K.), 25 August 1993.

Download references

Author information

Authors and Affiliations

  1. Institut d'Administration et de Gestion, Université Catholique de Louvain, Place des Doyens, 1, B-1348, Louvain-la-Neuve, Belgium

    Daniel Tyteca

Authors
  1. Daniel Tyteca
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

About this article

Cite this article

Tyteca, D. Linear Programming Models for the Measurement of Environmental Performance of Firms—Concepts and Empirical Results. Journal of Productivity Analysis 8, 183–197 (1997). https://doi.org/10.1023/A:1013296909029

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1023/A:1013296909029

Search

Navigation