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On Modeling Environmental Production Characteristics: A Slacks-Based Measure for China’s Poyang Lake Ecological Economics Zone

Computational Economics volume 46, pages 389–404 (2015)Cite this article

Abstract

Environmental issues are currently of great concern, especially in the area of sustainable development. Thus, data envelopment analysis (DEA) has enjoyed much popularity, given its ability to measure environmental efficiency and shadow prices at the macro-economic level. In this study, we use the duality theory of slacks-based measure in DEA to develop a general procedure for modeling environmental production characteristics. By using the proposed methodology, we can measure environmental technical efficiency, the shadow prices of emissions, and inter-factor substitution possibilities. Further, we use the proposed methodology to carry out an empirical study of the Poyang Lake Ecological Economics Zone in China. Finally, we suggest some policy implications based on the study’s empirical results.

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Fig. 1

Notes

  1. However, recently, SBM is critical because it adjusts the inefficient observations to the frontier by going the maximum distance which is not consist with basic economic assumption. Alternative Minimum distance-SBM is proposed in Tone (2010) to overcome this problem.

  2. It should be noted that using the investment in fixed asset cannot represent the real capital stock, it is a limitation of this study due to the data unavailability.

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Acknowledgments

We thank the financial support provided by the National science foundation of China (41461118;41161087), Major Project of National Social Science Foundation, China (12&ZD213), and the China Postdoctoral Foundation (2014M551849).

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Authors and Affiliations

  1. Institute of Poyang Lake Eco-economics and Institute of Eco-civilization and Economics, Jiangxi University of Finance and Economics, Nanchang, 330013, China

    Ning Zhang, Fanbin Kong & Chih-Chun Kung

Authors
  1. Ning Zhang
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  2. Fanbin Kong
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  3. Chih-Chun Kung
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Correspondence to Ning Zhang.

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Zhang, N., Kong, F. & Kung, CC. On Modeling Environmental Production Characteristics: A Slacks-Based Measure for China’s Poyang Lake Ecological Economics Zone. Comput Econ 46, 389–404 (2015). https://doi.org/10.1007/s10614-014-9467-2

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  • DOI: https://doi.org/10.1007/s10614-014-9467-2

Keywords

  • SBM–DEA
  • Shadow prices of externalities
  • Substitution possibilities
  • Poyang Lake Ecological Economics Zone