Performance Measurement of Italian Provinces in the Presence of Environmental Goals

The widespread of sustainable development concept intimates a vision of an ecologically balanced society, where it is necessary to preserve environmental resources and integrate economics and environment in decision-making. Consequently, there has been increasing recognition in developed nations of the importance of good environmental performance, in terms of reducing environmental disamenities, generated as outputs of the production processes, and increasing environmental benefits. In this context, the aim of the present work is to evaluate the environmental efficiency of Italian provinces by using the non-parametric approach to efficiency measurement, represented by Data Envelopment Analysis (DEA) technique. To this purpose, we propose a two-step methodology allowing for improving the discriminatory power of DEA in the presence of heterogeneity of the sample. In the first phase, provinces are classified into groups of similar characteristics. Then, efficiency measures are computed for each cluster.