Investigating the energy efficiencies of OECD countries via a slack-based undesirable output model

Energy efficiency has a growing importance both for developed and developing countries within OECD. This study investigates the energy efficiency levels for OECD countries for the 2010-2014 period via a slack-based, undesirable output model, a popular data envelopment analysis (DEA) approach. Efficiency analyses have been carried out with two sub-groups of OECD countries. Within the framework of the DEA analyses, the primary energy consumption, total number of employees and gross capital formation as inputs and CO2 emission and gross domestic product (GDP) as outputs have been selected. In further, a binary logistic regression method has also been applied so as to analyse the factors affecting the energy efficiencies of OECD countries. The effect levels of these factors have been determined by logistic regression analysis. Empirical analyses have shown that minimizing an undesirable output while maximizing desirable outputs for the energy has a crucial role for OECD countries in reducing environmental pollution and increase the competition capacity. Besides, logistic regression results have shown significant results for decision and policy makers in the energy sector. The results of this study show that OECD countries can achieve a good level of energy efficiency if they improve their economic activities by improving their environmental performance.