An overview of Total Factor Productivity estimations adjusted for pollutant outputs: an application to sugarcane farming

Richard Mulwa, Ali Emrouznejad, Ernst-August Nuppenau

Research output: Contribution to journalArticle

Abstract

The conventional Total Factor Productivity (TFP) measurement does not incorporate the effects of undesirable outputs, which are harmful to the environment. Using sugarcane farming in Kenya, this paper illustrates the differences between the conventional Malmquist index measures where the environment variable is not adjusted and environment-adjusted measures using both hyperbolic and directional distance functions. The mean TFP change estimates for the conventional Malmquist index, adjusted hyperbolic index and Luenberger indicator were 3.13%, 0.11% and 2.21%, respectively. The conventional non-adjusted measure lies between the two adjusted measures of hyperbolic index and Luenberger indicator.
Original languageEnglish
Pages (from-to)1-15
Number of pages15
JournalInternational Journal of Environmental Technology and Management
Volume15
Issue number1
DOIs
Publication statusPublished - 2012

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total factor productivity
Productivity
pollutant
index
indicator

Keywords

  • environmental efficiency
  • Malmquist index
  • hyperbolic distances
  • directional distances
  • strong and weak disposability
  • sugarcane farming
  • undesirable outputs

Cite this

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abstract = "The conventional Total Factor Productivity (TFP) measurement does not incorporate the effects of undesirable outputs, which are harmful to the environment. Using sugarcane farming in Kenya, this paper illustrates the differences between the conventional Malmquist index measures where the environment variable is not adjusted and environment-adjusted measures using both hyperbolic and directional distance functions. The mean TFP change estimates for the conventional Malmquist index, adjusted hyperbolic index and Luenberger indicator were 3.13{\%}, 0.11{\%} and 2.21{\%}, respectively. The conventional non-adjusted measure lies between the two adjusted measures of hyperbolic index and Luenberger indicator.",
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