Determinants of Environmental Efficiency of the EU Countries Using Two-Step DEA Approach

Abstract

The article discusses the environmental efficiency of the countries of the European Union and its main objective is to verify models that could be used to explain changes in efficiency in selected countries and to add to the contributions of other authors. Two-step Data Envelopment Analysis (DEA) has been used, which is a suitable method for verifying the statistical significance of environmental variables. Two DEA models—CCR and BCC—were used and efficiencies have undergone a double-bootstrap procedure. As input variables, three emission per capita indices were computed to single output GDP per capita. Three truncated regression models have been proposed. Results have shown that the model with drivers of climate change and variables connected to socio-economic factors is the most relevant and significant. There are common variables, whose improvement increases the efficiencies in all European Union countries, but there are also indices which have to be considered in individual/subgroup policies and implications, such as environmental taxes, waste management, resources productivity, and transport of goods management.