Modeling energy and air pollution health damaging: a two-stage DEA approach

Abstract

Various pollutants can cause serious health problems. One of these pollutants is sulfur dioxide which is associated with respiratory problems in humans. In this study, two-stage DEA method is used to estimate the efficiencies of 23 countries for the time period 1990–2017, using capital, labor, and energy consumption as inputs, GDP as a desirable intermediate which is going out of the system, and sulfur oxides as an undesirable intermediate and respiratory disease deaths as an undesirable output. The results showed Iceland, Luxembourg, and New Zealand as the most overall efficient countries in the time period 1990–2017. Previous works have used the additive Chen et al. (2009) two-stage DEA model in order to handle undesirable variables. The contribution of this study is the use of a modified multiplicative Kao and Hwang (2008) two-stage DEA model under the existence of undesirable variables. © 2021, The Author(s), under exclusive licence to Springer Nature B.V.