Testing for environmental Kuznets curve in the EU agricultural sector through an Eco-(in)efficiency index

Abstract

Studies on agricultural production practices advance within international literature and new methods are proposed in order to assess the agricultural sustainability, either at farm or macro level. The present paper builds on these advancements and develops a synthetic Eco-(in)efficiency index by employing a directional distance function-data envelopment analysis (DEA) model. This index is used in order to assess the sustainability of the EU agricultural sector for the period 1999-2012 on a country level. Furthermore, Eco-(in)efficiency, together with the energy use and greenhouse gas (GHG) emissions are regressed on the gross domestic product (GDP) of EU countries, in order to check for any environmental Kuznets curve relationship existence. Results signify that efficiency improvements are possible, both towards output development and GHG emissions reduction. In addition, the potential of each country in adopting more sustainable production practices is not totally connected with its economic development, as Eco-(in)efficiency and GDP levels of EU countries seem to be linked with an N-Shaped curve. © 2017 by the authors. Licensee MDPI, Basel, Switzerland.