EPRG 0712

Hongliang Yang, Michael Pollitt

Incorporating both Undesirable Outputs and Uncontrollable Variables into DEA: the performance of Chinese Coal-Fired Power Plants

EPRG 0712 Non-Technical Summary | PDF

Also published in:

  • Yang, Hongliang & Pollitt, Michael, (2009), “Incorporating both undesirable outputs and uncontrollable variables into DEA: The performance of Chinese coal-fired power plants,” European Journal of Operational Research, Elsevier, vol. 197(3), pages 1095-1105, September

Abstract: There are two difficulties in doing an objective evaluation of the performance of decision-making units (DMUs). The first one is how to treat undesirable outputs jointly produced with the desirable outputs, and the second one is how to treat uncontrollable variables, which often capture the impact of the operating environment. Given difficulties in both model construction and data availability, very few published papers simultaneously consider the above two problems. This article attempts to do so by proposing six DEA-based performance evaluation models based on a research sample of the Chinese coal-fired power plants. The finding of this paper not only contributes for the performance measurement methodology, but also has policy implications for the Chinese coal-fired power sector.

Keywords: Data envelopment analysis, performance measurement, technical efficiency, electricity

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