Monitoring environmental efficiency: An application to Italian provinces

With growing environmental legislation and mounting popular concern for the environment and the quality of life, there has been an increasing recognition in developed nations of the importance of good environmental performance, to assure the reduction of environmental disamenities (such as pollutant emissions and waste) generated as outputs of the production of goods and services. For this reason the impact of all kinds of organisations on environment needs to be identified.The main objective of this empirical study is to evaluate the environmental efficiency of Italian provinces for the year 2004 by using the non-parametric approach to efficiency measurement, represented by Data Envelopment Analysis technique. This method has to be modified to the context of environmental performance, considering three kinds of variables: inputs, outputs and undesirable outputs. In order to rate the performance of Italian provinces, we therefore propose a variant of this linear programming methodology and we extend the analysis to include the presence of environmental harms.