♻ Measuring eco-efficiency in generalized IO models: multidimensional approach
Henryk Gurgul, Łukasz Lach
This research was founded by National Science Centre of Poland (Research Grant no. DEC-2015/19/B/HS4/00088)
Main-idea: Proposal of a new approach to measuring eco-efficiency in generalized input-output (gIO) models with multiple policy goal variables. Formulation of sector-specific policy recommendations based on the outcomes of the new approach (case study: Poland).
For reference: H. Gurgul, L. Lach. Multidimensional approach to measuring eco-efficiency in generalized IO models. 3 September 2019. Russia, Sochi, 27th Inforum Conference, URL: https:// ecfor.ru/publication/measuring-eco-efficiency-in-generalized-io-models/
▪ Methodological aspects of the study: a new approach to measuring eco-efficiency in generalized input-output (gIO) models with multiple policy goal variables which may be used as a supplementary method to traditional DEA. Unlike DEA this approach takes into account detailed data on intersectoral flows in demand- and supply-oriented gIO models. In empirical applications, the heterogeneity of industries in terms of their size should also be explicitly taken into account, which is not always the case in the existing key sector studies.
▪ Temurshoev (2016) signalizes that if the effect of sector size is not corrected for one would very often and not surprisingly get an expectable outcome that big (small) industries have a big (small) impact on the whole economy, which will further disregard the greater cost of stimulating a large industry.
▪ For this purpose, the input-output linkages used in this study are size-adjusted by the relevant size or direct impact of the sectors.
We suggest to measure eco-efficiency in gIO models in a way similar to the general DEA-based approach, i.e. to define the eco-efficiency indicator as a ratio of the desired output effect to the size of undesired output.
Since we distinguish between backward and forward linkages in an economy, one should define separately the respective measures of the ‘backward eco-efficiency’ and ‘forward eco-efficiency’.
▪ In illustrative empirical case study we demonstrated possible applications of the new approach by conducting an empirical analysis aimed at identifying eco-efficient sectors. This part of the study was based on the application of the 1995 and 2009 national input-output tables and environmental accounts for Poland, which were taken from the WIOD database.
▪ The most important pollutant in Poland is the sector Electricity, Gas and Water Supply. Therefore we focused on this sector.
▪ We constructed the generalized demand-driven IO model for the composite undesired output (henceforth denoted as CUO) and the composite desired output variable (henceforth denoted CDO).We
aimed at minimizing traditional backward undesired output linkage of Electricity, Gas and Water Supply sector via changing elements of vector of composite undesired output policy goal variable.
▪ We took also interindustry flow data on the most important changes in input coefficients obtained after solving Optimization problem aimed at minimizing the traditional CUO backward linkage of the sector Electricity, Gas and Water Supply via changing the elements of the Leontief inverse.
The results were presented in tables and in the figures.
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This presentation happened 3 September 2019, Russia, Sochi at 27th Inforum Conference.
The conference & materials: https://ecfor.ru/27th-inforum-world-conference/
Playlist with the other videos from the conference: https://www.youtube.com/playlist?list=PLJBJFs8UgQgpmWWFzqw87jdwOBQXQmLfu
Inforum’s site: http://www.inforum.umd.edu/
Inforum, or Interindustry Forecasting at the University of Maryland, was founded nearly 50 years ago by Dr. Clopper Almon, now Professor Emeritus of the University. It is dedicated to improving business planning, government policy analysis, and the general understanding of the economic environment.
The host side was the Institute of Economic Forecasting of the Russian Academy of Sciences. IEF RAS specializes in fundamental, applied and exploratory scientific research in the field of analysis and forecasting of the socio-economic prospects of Russia and its regions, and the development of recommendations and proposals with a goal to improve the quality of economic policy in Russia. The site is https://ecfor.ru.
