Environmental performance in OECD countries: A non-radial DEA approach

Data Envelopment Analysis (DEA) has become popular in performance measurement in the environmental area because it can provide a synthetic standardised performance index when pollutants are appropriately incorporated into the traditional DEA framework. Existing studies on the application of DEA to measure the environmental performance often follow the concept of a radial efficiency. In this paper, we use the non-radial and non-oriented DEA approach (SBM model) with undesirable output under the condition of constant rerun to scale. Since the slacks-based model (SBM model) integrates all the slacks in inputs and desirable outputs into a whole, the result can provide some standardised composite index with a higher discriminating power for modelling environmental performance. We apply the SBM model to measure environmental performance in OECD countries during the 1995-2014 period. We can see that the environmental performance of OECD countries as a whole has improved from 1995 to 2014. As the most efficient countries, we considered France, Italy and Switzerland, which were efficient during the wholly analysed period. On the other hand, the lowest efficiency was in countries like the Czech Republic, Hungary, Poland, and Slovakia. The highest progress obtained the Lithuania, where the efficiency score increased from 10.17 % in 1995 to 26.22 % in 2014. The biggest fall is evident in the case of Portugal, where the efficiency score fell from 40.8 % in 1995 to 29.55 % in 2014.