MEASURING UNDESIRABLE OUTPUT IN EFFICIENCY EVALUATION: THE CASE OF TANNERIES IN PAKISTAN
Keywords:
Efficiency, Undesirable output, Biological Oxygen Demand (BOD), Chemical Oxygen Demand (COD), Chromium (cr), Data Envelopment Analysis (DEA), Weak disposability Property.Abstract
The present paper estimate efficiency for the Pakistani leather tanning industry under alternate assumptions of weak and sturdy disposability of undesirable outputs. Data envelopment technique (DEA) is used for modeling of undesirable outputs to individual tanning units in order to assess their relative efficiency using their production data. Data on the amounts of inputs (raw hide/skin, labor, capital, fuel), outputs (tanned leather) and water pollutants (BOD, COD, and chromium) for 50 leather tannery firms or decision-making units (DMUs) operating within the industrial estates of Karachi, Lahore and Multan basin drained by Malir, Ravi and Chenab rivers respectively, were collected. The efficiency measures of these DMUs reveal many inefficient firms reflecting low level of amenability with liquid effluents standards.
