TY - JOUR

T1 - Analysis of environmental efficiency variations

T2 - A nutrient balance approach

AU - Hoang, Viet Ngu

AU - Nguyen, Trung Thanh

N1 - Funding Information: This study was carried out as part of the International Research Training Group TERRECO (GRK 1565/1) funded by the German Research Foundation (DFG) at Bayreuth University , Germany and the Korean Research Foundation (KRF) at Kangwon National University , South Korea. We express our thanks to Bumsuk Seo for the data processing and Associate Professor Valentin Zelenyuk for giving us the Matlab codes.

PY - 2013/2

Y1 - 2013/2

N2 - Recent literature has argued that environmental efficiency (EE), which is built on the materials balance (MB) principle, is more suitable than other EE measures in situations where the law of mass conversation regulates production processes. In addition, the MB-based EE method is particularly useful in analysing possible trade-offs between cost and environmental performance. Identifying determinants of MB-based EE can provide useful information to decision makers but there are very few empirical investigations into this issue. This article proposes the use of data envelopment analysis and stochastic frontier analysis techniques to analyse variation in MB-based EE. Specifically, the article develops a stochastic nutrient frontier and nutrient inefficiency model to analyse determinants of MB-based EE. The empirical study applies both techniques to investigate MB-based EE of 96 rice farms in South Korea. The size of land, fertiliser consumption intensity, cost allocative efficiency, and the share of owned land out of total land are found to be correlated with MB-based EE. The results confirm the presence of a trade-off between MB-based EE and cost allocative efficiency and this finding, favouring policy interventions to help farms simultaneously achieve cost efficiency and MP-based EE.

AB - Recent literature has argued that environmental efficiency (EE), which is built on the materials balance (MB) principle, is more suitable than other EE measures in situations where the law of mass conversation regulates production processes. In addition, the MB-based EE method is particularly useful in analysing possible trade-offs between cost and environmental performance. Identifying determinants of MB-based EE can provide useful information to decision makers but there are very few empirical investigations into this issue. This article proposes the use of data envelopment analysis and stochastic frontier analysis techniques to analyse variation in MB-based EE. Specifically, the article develops a stochastic nutrient frontier and nutrient inefficiency model to analyse determinants of MB-based EE. The empirical study applies both techniques to investigate MB-based EE of 96 rice farms in South Korea. The size of land, fertiliser consumption intensity, cost allocative efficiency, and the share of owned land out of total land are found to be correlated with MB-based EE. The results confirm the presence of a trade-off between MB-based EE and cost allocative efficiency and this finding, favouring policy interventions to help farms simultaneously achieve cost efficiency and MP-based EE.

KW - Environmental efficiency

KW - Materials balance

KW - Nutrient efficiency

KW - Nutrient stochastic frontier

KW - Single-bootstrap truncated regression

UR - http://www.scopus.com/inward/record.url?scp=84872386942&partnerID=8YFLogxK

U2 - 10.1016/j.ecolecon.2012.10.014

DO - 10.1016/j.ecolecon.2012.10.014

M3 - Article

AN - SCOPUS:84872386942

VL - 86

SP - 37

EP - 46

JO - Ecological economics

JF - Ecological economics

SN - 0921-8009

ER -