The analysis of energy efficiency of the Mediterranean countries: A two-stage double bootstrap DEA approach

The main purpose of this paper is to examine the energy efficiency determinants in Mediterranean countries over 2009-2012. In order to account for both the bias and serial correlation of efficiency scores, we use the double bootstrap procedure suggested by Simar and Wilson (2007) which allows for valid inference. By using a specific bootstrap procedure in the first stage, the DEA efficiency estimator is corrected for the bias. A parametric bootstrap procedure is also applied, in the second stage analysis, to the truncated regression of DEA bias-corrected efficiency scores on environmental variables. In the first stage, empirical findings show that energy efficiency levels in the Mediterranean countries are high and declining over time. The results of the second stage analysis reveal that the gross national income per capita, the population density, and the renewable energy use impact energy efficiency. Finally, the study provides policy implications for future improvement of energy efficiency.