Measuring environmental performance in Iran by using Malmquist index

Healthy environment is an inseparable component of any nation development. Therefore, it is a requirement of economic development to plan for its quality improvement. The main aim of present study is to investigate the performance of Iranian environment by using numeric indices. To this end, two groups of outputs should be defined: good outputs and bad outputs. Then, an index is defined for each output. We use distance functions to define an index for each output. Distance functions only need information on input and product. Since bad products have no market, they lack any market price. To the same reason, environmental index performance is computed by distance functions and Malmquist’s numeric index. In fact, the aim is to find an index on the ratio of good output to bad one. The study was conducted between 1991 through 2002. The findings indicate that Iran has no good performance within this period and the best environmental performance is seen in 1991 and the worst one in 1991

Keywords:

data envelopment analysis , distance functions , environmental performance index