Eco-efficiency analysis in generalized IO models: Methods and examples

Performance assessment in the presence of undesirable outputs, such as pollutant emissions, is usually modelled within the framework of data envelopment analysis (DEA). In this paper we propose a new approach to measuring eco-efficiency in generalized input-output (gIO) models which may be used as a supplementary method to traditional DEA. Unlike DEA this approach takes into account detailed data on intersectoral flows in supply- and demand-driven gIO models. We focus on cases of traditional and sector-size-adjusted measures of interindustry linkages in gIO models and in each case we suggest respective indices of eco-efficiency and prove their usefulness in policymaking. In order to illustrate possible applications of the new approach we conduct an empirical analysis aimed at identifying the eco-efficient sectors based on the 1995 and 2009 national input-output tables and environmental accounts for Poland which are provided by the World Input Output Data (WIOD) database.