Environmental Assessment on Energy and Sustainability by Data Envelopment Analysis

4RADIAL MEASUREMENT

4.1 INTRODUCTION

This chapter ¹ discusses radial models for efficiency measurement. Efficiency is referred to as “technical efficiency” in conventional DEA and is “operational efficiency” in this chapter and the whole book. The concept of technical efficiency was first axiomatically proposed by Debreu (1951, 1959). Following the work of Debreu (1951)², Farrell (1957)³ used a well‐known “activity analysis approach” with matrix inversions. Based upon the advice of Alan Hoffman (an operational researcher), who was one of the commentators on Farrell (1957), Farrell and Fieldhouse (1962) proposed a linear programming formulation for measuring a level of so‐called “technical efficiency,” or operational efficiency (OE) in this book. Unfortunately, almost no attention had been given to their works on efficiency measurement for a long time. The efficiency measurement was extensively investigated after Charnes et al. (1978) proposed DEA, as discussed in the preceding chapters. It is easily imagined that methodologies for environmental assessment discussed in Section II of this book can be considered as extensions from a conventional use of DEA. See Chapter 1. The DEA environmental assessment, discussed in chapters of Section II, is concerned with energy and sustainability as a research focus, along with conceptual and structural developments from DEA.

Generally speaking, the previous DEA research proposed two groups of models. One of the two groups was referred to as “radial ...