Measuring environmental performance with stochastic environmental DEA: The case of APEC economies

- We present a model for measuring environmental performance under random conditions.
- We deduce an equivalent deterministic form of stochastic environmental DEA model.
- We define a stochastic pure environmental performance index.
- Random factors affect APEC economies' stochastic pure environmental performance.
- South Korea's stochastic pure environmental performance fluctuated visibly in 2010.

Data envelopment analysis (DEA) has been widely used for environmental performance measurement at different levels. Most of environmental DEA models take the deterministic form without considering random factors. This paper presents a stochastic environmental DEA model that can measure environmental performance under random conditions. The proposed model has been applied to evaluate the environmental performance of Asia-Pacific Economic Cooperation (APEC) economies in 2010. The results indicate that the stochastic pure environmental performance of APEC economies is indeed affected by random factors. Especially, the fluctuation of Republic of Korea's stochastic pure environmental performance is most obvious among all the APEC economies.