European Energy Efficiency Evaluation Based on the Use of Super-Efficiency Under Undesirable Outputs in SBM Models

Abstract

Although Data Envelopment Analysis models have been intensively used for measuring efficiency, the inclusion of undesirable outputs has extended their use to analyse relevant fields such as environmental efficiency. In this context, slacks-based measure (SBM) models offer a remarkable alternative, largely due to their ability to deal with undesirable outputs. Additionally, super-efficiency evaluation in DEA is a useful complementary analysis for ranking the performance of efficient DMUs and even mandatory for dynamic efficiency evaluation. An extension to this approach in the presence of undesirable outputs is here introduced and then applied in the context of the environmental efficiency in electricity and derived heat generation in the European Union, providing the necessary tool to detect influential countries.